Tuition Reimbursement Update
What Has Changed?
As a result of an audit during the summer of 2012, the District was informed of calendar year educational assistance (tuition reimbursement) limits.
Employers can exclude up to $5,250 of educational assistance during any calendar year. Employees must generally pay tax on the amount over $5,250 and that amount should be included in the employees’ wages (Form W-2, box 1).
How Will Payments Change?
For the 2012 calendar year:
Teachers that have exceeded the $5,250 limit will have a non-wage item processed with the December 7, 2012 pay and will pay Social Security taxes on the amount exceeding the limit.
For example:
2012 tuition reimbursement of $5,400 minus $5,250 (limit) equals $150 (taxable amount)
$150 taxable amount will be reflected in the December 7, 2012 pay as a non-wage item
For the 2013 calendar year:
Teachers that exceed the educational assistance limit as established by the Department of the Treasury will have that amount processed as a Payroll item with all applicable taxes withheld.
Where Can I Get More Information?
- Department of the Treasury Internal Revenue Service Publication 15-B (Employer’s Tax Guide to Fringe Benefits)
- Department of the Treasury Internal Revenue Service Publication 970 (Tax Benefits for Education)
- Rick Gallant, Corning Teachers’ Association President
- Pat Overstrom, Personnel Services