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Tuition Assistance Payback Rules

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  • 05-05-2015, 07:05 PM
    kb2010lc
    Tuition Assistance Payback Rules
    My question involves labor and employment law for the state of: Connecticut

    My company has a tuition assistance program which allows an employee to receive a maximum $15,000 in tuition reimbursement. After 5,250 is reimbursed, any additional assistance is considered a fringe benefit and gets taxed. If I leave my company within 2 years of receiving reimbursement, I would have to pay back the amount given to me within 30 days.

    If I leave, will I be responsible for paying back the gross amount received or net amount after tax?

    For example (numbers are made up just to make things easier)
    • Spring Semster 2014 my tuition cost 5,500 ($250 taxable), I was reimbursed 5,250
    • Summer Semster 2014 my tuition cost 5,500 ($5,500 taxable), I was reimbursed 3,000
    • Fall Semster 2014 my tuition cost 4,000 (4,000 taxable), I was reimbursed 2,200



    Gross reimbursed: $15,000
    Net reimbursed, after taxes: $10,450
  • 05-06-2015, 02:04 AM
    brownj12
    Re: Tuition Assistance Pay Back
    Absent anything that says otherwise, you will owe the full amount, $15,000. You will have to consult with a tax professional about your options for recovering the money you paid in taxes, I am not sure what if any refund you may be due.
  • 05-06-2015, 02:52 AM
    Taxing Matters
    Re: Tuition Assistance Pay Back
    Quote:

    Quoting brownj12
    View Post
    You will have to consult with a tax professional about your options for recovering the money you paid in taxes, I am not sure what if any refund you may be due.

    The tax issue would be addressed on the return for the year in which the repayment was made, not as an amended return seeking a refund of tax in the prior years in which the tuition assistance was included in income. See the discussion of repayments in IRS Publication 525 for more on that.
  • 05-06-2015, 09:07 AM
    cbg
    Re: Tuition Assistance Pay Back
    FYI, the $5,250 limit is set by law, not by the employer.
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