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You can exclude up to $5,250 of educational assistance benefits you received from your employer. To qualify for the exclusion, the benefits must be part of a written educational assistance program. Your employer can tell you whether your benefits are part of a qualified program. These excluded benefits are not included in wages in Box 1 of your Form W-2 Wage and Tax Statement.

Qualifying assistance can include payments for:

  • Tuition,
  • Fees, and
  • Expenses for books, supplies, and equipment.

Payments you receive do not need to be for work-related courses and do not need to be part of a degree program.

Payments for the following items do not qualify and cannot be excluded from income:

  • Meals, lodging, or transportation.
  • Tools or supplies (other than textbooks) that you can keep after completing the course.
  • Courses involving sports, games, or hobbies (unless they have a reasonable relationship to your business or are required as part of a degree program).

You must generally pay tax on any educational assistance benefits over $5,250. These amounts should be included in your wages in Box 1 of Form W-2. However, if the payments over $5,250 qualify as a fringe benefit, your employer does not need to include them in your wages. A fringe benefit is a benefit you could deduct as an employee business expense had you paid for it.

Note. The educational assistance exclusion is different from the business deduction for work-related education. See pages 59 and 60 of IRS Publication 970 Tax Benefits for Education for more information on the exclusion and business deduction.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.


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