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Do you have to pay taxes on any tuition, books, supplies, and equipment that your employer paid for, when you attended college or graduate classes?
If you take advantage of educational assistance benefits offered by your employer, you can exclude up to $5,250 from your income each year. Excluding these benefits from your income means that the value of educational benefits you receive from your employer won't be included in your W-2, and won't be taxable to you on your tax return.
Of course, there are requirements for the kind of coursework this covers. In addition, your employer must have a written plan and meet certain other requirements in order for you to qualify.
Educational assistance covers payments for tuition, fees, books, supplies, and equipment.
The courses can be graduate or undergraduate courses, and they don't have to be related to your job.
Educational assistance doesn't include the following expenses, even if they are related to doing the actual coursework:
- Meals
- Lodging
- Transportation
- Tools or supplies (other than books) that you keep after completing the course
- Education involving sports, games, or hobbies unless it has a relationship to your
employer's business or is required as part of the degree program
Any amount over $5,250 that your employer pays is generally taxable and will be included on your W-2. If, however, the amount qualifies as a working condition fringe benefit, your employer can exclude it from your W-2. To qualify as a working condition fringe benefit, the extra amount must be applied to job-related education. Find out if the education for which your employer pays must be job-related.
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