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