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Taxation of Educational Assistance

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Angela Bennett is an employee at Coopers and Smith CPA firm. Angela, a part-time student, is working on her graduate degree in history. Coopers & Smith which has an educational assistance program reimburses Angela $6,000 of her educational expenses she incurred in the year.

What amount, if any, of Coopers & Smith's reimbursement will be included in Angela's income?

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This solution discusses the taxation of educational assistance.

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IRC section 127(a)(1) states that "Gross income of an employee does not include amounts paid or expenses incurred by the employer for educational assistance to the employee if the assistance is furnished pursuant to a program which is described in subsection (b)." (The conditions described ...

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