The process and specifics of this benefit differ from one employer to the next. Generally speaking, however, tuition reimbursement usually involves your employer reimbursing you for a defined amount of the educational expenses you encounter when pursuing continuing education courses and/or a college degree.
Often, there are specific employer guidelines that you need to meet in order to receive this benefit. For example:
Tuition reimbursement provides a tax benefit for employers. According to the IRS’s Fringe Benefits Guide (2020), employers can offer employees $5,250 of educational assistance tax-free each year.
Employees can also deduct this amount as tax-free income that is being used for educational purposes. If you receive tuition reimbursement in excess of the tax-free amount defined by the IRS each year, however, it’s important to note that this money will be considered taxable income.