Tuition Assistance Programs

Some employers offer education or tuition-assistance programs. These can be a valuable fringe benefit. You can exclude up to $5,250 of this education assistance from your income.

Typically, these are payments by an employer for your education expenses. The expenses can include but:

• Tuition
• Fees and similar payments
• Books
• Supplies
• Equipment

An educational assistance plan can also include employer-provided:

• Instructional courses
• Expenses like:
  • Books
  • Supplies
  • Equipment

Educational assistance doesn’t include providing or paying for these items:

• Tools or supplies — other than textbooks — that you can keep after completing a course
• Meals or lodging
• Transportation
• Courses or other education involving sports, games, or hobbies — unless the course either:
  • Relates to the employer’s business
  • Is required as part of a degree program

Your total education benefits might be more than $5,250. If so, the exclusion applies to the first $5,250 in benefits you receive during the year.

Some employees receive education benefits not covered by this provision. So, you might be able to exclude them as job-related educational expenses. To qualify, the course must:

• Benefit the employer
• Apply to your job
• Be an undergraduate, graduate, or continuing professional education course

To learn more, see Publication 970: Tax Benefits for Education at www.irs.gov.