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# Tax Ramifications of Firm Tuition Payment??

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Manager
Joined: 08 Mar 2009
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Tax Ramifications of Firm Tuition Payment?? [#permalink]

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08 Apr 2009, 08:41
Is it true that when a firm pays your tuition, say \$25,000K year, the employee is responsible for this as taxable income...you have to add it to total income and pay taxes?

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Senior Manager
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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]

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08 Apr 2009, 09:13
yeah, there is non-taxable cap, think its around \$5000 give or take. So, everything above that amount is taxable. Lets say u receive 25k. u deduct 5k (not sure about exact number) and pay taxes on 20k. Unless ur company agrees to pay ur taxes as well.
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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]

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08 Apr 2009, 10:44
So is that amount above the cap taxed at your income tax rate?

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Intern
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Location: Atlanta, GA
Schools: Georgia Tech, University of Georgia,
Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]

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08 Apr 2009, 11:27
IRS non-taxable amount is currently \$5,250/year. Anything greater is taxed as income.

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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]

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08 Apr 2009, 11:52
So what are some of the current strategies to avoid/minimize taxes in this way? Seems this could have nasty tax ramifications, like possibly putting someone in a higher tax bracket.

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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]

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09 Apr 2009, 08:50
actually, i believe that if a tuition reimbursement program is designed correctly, no amount is taxable if you can classify the educational program a "working condition benefit" as defined in IRS publication 15.

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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]

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10 Apr 2009, 06:19

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Re: Tax Ramifications of Firm Tuition Payment?? [#permalink]

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14 Apr 2009, 14:39
So it can be classifed as nto income based on page 22? I believe I will have taxes taken out when I attain reinbursement.

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Re: Tax Ramifications of Firm Tuition Payment??   [#permalink] 14 Apr 2009, 14:39
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# Tax Ramifications of Firm Tuition Payment??

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