USA Employee Tuition Reimbursement


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I wanted to get a better understanding of the tax implications for a company reimbursing the employee's tuition. Is the tuition reimbursement a dollar for dollar expense for the company? Also, what are the cons of a company paying for employee expenses like tuition reimbursement, auto draws, lunch, etc if it decreases the company's net income and their tax liability? Your clarification and help is greatly appreciated.

Thank you,
 
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smallbushelp

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Are you the business owner or an employee? There are not many cons for a company that wants to provide fringe benefits to its employees. The con is for the employee because most fringe benefits are taxable to the employee and must be included in the recipient's pay unless specifically excluded by law. And yes, most fringe benefits are 100% deductible to the employer.

You may want to consult IRS Publication 15B, Publication 970 (which deals with education assistance), Publications 5137 and 535 for more information.
 

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