Four Steps to Using Your Employer's Tuition Assistance Program Part 3

Educational assistance benefits do not include payments for the following items or costs of college.

  1. Meals, lodging, or transportation.
  2. Tools or supplies (other than textbooks) that you can keep after completing the course of instruction.
  3. Courses involving sports, games, or hobbies unless they:
    • Have a reasonable relationship to the business of your employer, or
    • Are required as part of a degree program.4

Your employer, however, may put in place more limiting requirements than does the IRS. For example, your employer may require that the payments be for work-related courses. Or, as is common, your employer may have a duration of employment stipulation before you are eligible to enroll in their tuition benefit program. For example, they may require that you’ve been employed at the company for a minimum of 2 to 3 years before becoming eligible for enrollment.

In addition, your employer may reimburse educational costs beyond the tax-free benefit of $5,250. If this is the case, you must pay tax on the amount over $5,250. Your employer will include the tuition reimbursement benefit amount over $5,250 in your wages on your W-2, an amount considered included in your income.5

The Forth Step: Measuring Progress

When you take advantage of your employer’s educational assistance benefits, you’ll want to be sure you are getting a good return on your investment in time and your employer, certainly, will want to be sure they are getting a good return on their investment in you.

As you progress through your education, whether it’s at the undergraduate or graduate level, you’ll want to be sure that the courses you are taking are pointing you in the direction you ultimately want to go. If your educational path and career trajectory begin to diverge, you may want to reassess the types of classes you are taking. Alternatively, you may want to take on new projects at work, or look beyond your current department, and ask for a chance to apply your new skills in different areas of the business.

Remain diligent about your time commitments. Pay attention to your course load and its effect on your life. Be honest with yourself: is working while going to college right for you. The first semester is a good time to pay attention to your work and education balance and if it’s all fitting together. If things are out of balance, you may need to shift your priorities appropriately going forward. Look internally, and yourself these questions: With the new commitments on your time, is your performance at work suffering? Have you found that you are able to perform at school the way you want given your responsibilities at work? Since many employer education programs are in some fashion tied to grades earned, you’ll want to be sure that you can successfully manage the number, and types, of college courses you are taking per semester to remain eligible for tuition reimbursement.

Take Advantage of your Employer Sponsored Educational Benefits

If your employer offers a tuition assistance reimbursement program, you are fortunate. Be sure you take advantage of this opportunity to invest in yourself and don’t leave money on the table.

Education is a forever benefit. It’s something that can be, and is, used every day on the job. It’s something that you can take with you if circumstances change, and you do need to leave your current position. Whenever there’s an opportunity to link up personal and professional goals, such as there is through employer-sponsored tuition programs, you owe it to yourself to take part. Don’t leave money, and your personal and career advancement, on the table.

4 IRS, Employer-Provided Educational Assistance