Tax implications of employer tuition reimbursement
Thread DetailsLast Edited by Dr. J September 23, 2011 at 06:39 PM
Now I know there are IRS regulations about taxation of reimbursements, but the conditions seem unclear. I see the number $5250 slung around as a minimum exemption (e.g. standard deduction), but the full amount may be deductible depending upon certain rules.
I have never seen anything regarding the reimbursements in tax documents. When I am reimbursed, it's just like an expense reimbursement - I get a check, cash it, and that's it. No IRS forms, nothing.
I am just wondering what to expect this year - I don't want to get to tax time and realize that I'll owe another $1k or something. Also, let's say that the first $5250 is "free"; can I "write off" the remainder ($8k or whatever it is) as an education expense? It seems kind of nonsensical if the excess is taxable, but I can write it off, thereby negating the original levy? [e.g. lifetime learning credit is 20% of the tuition with a max of $2k (e.g. $10k in expenses). SO if your effective tax rate is less than the 20%, the LL credit will pay for the tax levy]
[btw I am an engineer getting my MBA]