An employer-provided education or tuition assistance program can be a valuable fringe benefit. By law, you can exclude up to $5,250 of employer-provided education assistance from your income.
For this purpose, educational assistance is the payment by an employer of education expenses incurred by an employee. It includes, but is not limited to, these expenses:
Tuition
Fees and similar payments
Books
Supplies
Equipment
An educational assistance plan can also include employer-provided instructional courses and expenses, including books, supplies, and equipment.
Educational assistance doesn’t include providing any of the following items or paying for them:
Tools or supplies (other than textbooks) that can be retained by the employee after the completion of a course
Meals, lodging, or transportation
Any course or other education involving sports, games, or hobbies, unless the course relates to the employer’s business or is required as part of a degree program
If your total educational benefits exceed $5,250, the exclusion applies to the first $5,250 of educational benefits furnished during the year. If you received education benefits not covered by this provision, you might be able to exclude them as job-related educational expenses.
To qualify, the course must benefit the employer and be applicable to the employee’s job. In addition, it must be an undergraduate, graduate, or continuing professional education course.
For more information, see IRS Publication 970: Tax Benefits for Education.