If you are currently employed and you are interested in taking college courses or pursuing a degree in order to advance your career, be sure to check with your company’s human resources department to find out if tuition reimbursement is an option for you.
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.