The tax law allows employees to exclude from income up to $5,250 of employer-provided educational assistance.
To be excluded, the educational benefits you receive from your employer must be received as part of a "qualified educational assistance program." Your employer can tell you if the benefits you received qualify.
A restriction that used to prohibit tax-free benefits to pay for graduate-level classes has been eliminated.
Employer payments for tuition and fees and for books may be excluded from income. However, payments for meals, lodging, transportation, and supplies (other than textbooks) that you can keep after completing the class may not be excluded from income.
Payments for education involving sports, games, or hobbies generally do not qualify for the exclusion. However, there are exceptions.
You may not take the Hope credit or the lifetime learning credit for any educational expenses that you excluded from gross income under your employer's educational assistance program.
For more information, you may want to visit the following: