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Anne
Anne, Master Tax Preparer
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Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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With respect to qualifying scholarship programs, what is an

Customer Question

With respect to qualifying scholarship programs, what is an example of a course of study that is of "particular benefit to employer"? I have a foundation that provides scholarships for a management training course for employees of credit unions. The course is given of a three year period and includes various banking related areas of study. The scholarship is limited to employees of credit unions, and no training courses are available for the employee to choose.
Submitted: 4 years ago.
Category: Tax
Expert:  Anne replied 4 years ago.
Hi

Thank you for using justanswer. This is a great question.

In order to be compliant with IRS's rule that the course of study NOT be of particular benefit to the employer, The recipient must have free choice in the pursuit of a course of study.

Recipients must be enabled to obtain an education solely for their personal benefit. No commitments, understandings, conditional or unconditional, that would accomplish any objective of the employer, may be attached to the award.

I truly hope this information is helpful but please do not rate until you are satisfied. If you want to click on 1 or 2 just click on the continue to work with me button instead. You will then be able to add any other info or respond to what I have posted so far. Rating 3-5 gives me credit and a good rating but you can still converse with me.


Customer: replied 4 years ago.

I found the following paragraph in some research that I did:


Course of Study. The course of study may not be limited to those that are are of particular benefit to the employer. If the courses of study includes one or more of benefit to the employer, the scholarship may not be conditioned on the recipient choosing that particular course of study. The recipient must have a free choice as to pursui9t of a course of study.


 


Apparently a course could by of particular interest to the employer, if the student has a alternative choice. I still do not have a clear definition of what constitutes a course of benefit to the employer. A wide range of courses could be of benefit to employers if the employee is better educated generally. That is why employers ask for a person's level of education. What is meant by "of particular benefit to the employer"?

Expert:  Anne replied 4 years ago.
The key part of all of this is that the recipient not be REQUIRED to take courses that would benefit the employer.

However, there is nothing from stopping the recipient from taking courses that would be a benefit to the employer if that was their choice.

I hope this helps.

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