Number: RS22911
Title: Tax Treatment of Employer Educational Assistance for the Benefit of Employees
Authors: Linda Levine, Domestic Social Policy Division 
Abstract: Educational assistance offered by employers to their employees may be exempt from federal income tax under Section 127 and Section 132 of the Internal Revenue Code. Section 127 is the employer educational assistance exclusion; Section 132, the fringe benefit exclusion for working condition benefits (e.g., job-related education) among other benefits. Congress established the two tax provisions well before it enacted other higher education tax benefits meant to assist taxpayers, their spouses, and dependents - regardless of employment status - pay current educational expenses incurred while obtaining postsecondary degrees and undertaking lifelong learning.
Pages: 6
Date: July 3, 2008