Can I collect tuition reimbursement from two employers consecutively?

by James G. McGrory, CPA, and Stephanie K. Otake, CPA | Oct 31, 2018
askacpaicon

I work two jobs that both offer tuition reimbursement. My school’s annual tuition, on a part-time basis, is about $11,000. I want to know if I am able to collect the $5,225 from each employer consecutively (use one employer for three trimesters and the other for the other three). From an employer’s perspective, I'm not really collecting money at that time from any other source. Or is that splitting hairs? If I am allowed to legally do this, are there any federal tax implications?

You should be able to use the educational benefits from each employer. Tuition reimbursement generally would be considered compensation to you, and would be reported on your Form W-2. However, the IRS allows up to $5,250 to be excluded from compensation income shown on box 1 of Form W-2. If your employer pays more than this amount, then the excess will be included on your W-2, and thus will be included in your taxable income.

Companies typically have specific requirements in order to be eligible for tuition reimbursement. Be sure to check that your educational expenses qualify for each employer under their respective tuition reimbursement programs, and obtain any necessary approvals to claim your reimbursement.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: James G. McGrory, CPA, and Stephanie K. Otake, CPA, are with Drucker & Scaccetti in Philadelphia.

Disclaimer
The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
Ask a CPA

Search the most frequently asked finance and accounting questions and read the responses from PICPA members. Always consult a CPA before taking action.

Search