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Marvin,EA, Enrolled Agent
Category: Tax
Satisfied Customers: 1672
Experience:  Enrolled to Represent Taxpayers Before The IRS
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My compnay has offered to pay for the remaining ...

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My compnay has offered to pay for the remaining potriton of my tuition (as the studies apply to my work here) if I agree to stay on another 24 months. It is well over the $5,250 limit, so I understand that the surplus amount would be taxed...however isn''t there aslo a stipulation according to Pub 15-B for employers that "if the amount exceeds 5250, you can exclude the value of theses benefits from wages if they are working condition benefits." Then it says see Working condition benefits and that says "This exclusion applies to property & services you provide to an employee so that the employee can perform his or her job. It applies to the extent th employee could deduct property or services as a business expense if he or she paid for it....An example would be...job-related education provided to an employee....The education must meet one of the following - The education maintains or improves skills needed on the job" would my company''s offer qualify for this stipulation? Thank U!
Submitted: 8 years ago.
Category: Tax
Expert:  Marvin,EA replied 8 years ago.
Hello and thank you for using Just Answer. If the tuition payments received from your employer is for the education you need to maintains or improves skills needed on the job your company would not have to add the amount to your income. Is your company going to add the educational cost to your wages?
Customer: replied 8 years ago.
Reply to Marvin,EA's Post: Not if they don't have to. Basically I am the first person they would be doing this for so (they are a foreign compnay that just expanded to the US)it is new to them as well (which is why I am trying to get as much info as possible.) They are happy to pay it and not include it as wages if that is withing the IRS guidelines. So would they just need to write up a formal document that states they will pay X amount for my education at X school during X time because the skills aquired will improve/maintain my skills at X company? Is that sufficient for the IRS? Or does this need to be under a qualified tuition plan? What would you suggest? Thank you in advance!
Expert:  Marvin,EA replied 8 years ago.
Working Condition Fringe Benefit (IRC 132(d)) Employer-provided education is excludable from an employee's income if the expenses would have been deductible as a business expense if paid out of the employee's pocket. The education must improve and maintain the employee skills needed on the job. Your employer would report the deduct as a working condition fringe benefit expense. This expense will not be under a qualified tuition plan.
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