Potential Taxation of Tuition Assistance

As we approach the end of the year, there remains much uncertainty regarding potential changes in the U.S. tax code, including a planned provision to exclude from income up to $5,250 a year in employer-provided tuition assistance for undergraduate and graduate-level courses.

The provision, Section 127 of the U.S. tax code, is set to expire Dec. 31, 2012. If Congress does not extend the legislation, reimbursements through Duke’s Employee Tuition Assistance program would become taxable beginning January 2013. The provision was established in 1978 and has been extended by Congress several times, most recently in 2010.

Employees currently enrolled in Duke’s Employee Tuition Assistance Program have been notified of the pending legislation by Duke Human Resources. Any requests for reimbursement of classes for 2012 must be received in the Benefits office by Dec. 14, 2012, to ensure full reimbursement is made by Dec. 31. Any reimbursement requests received afterward cannot be guaranteed to be reimbursed before Dec. 31, and reimbursements issued as of Jan. 1, 2013, will be taxable if the legislation is not extended.

Communication is also being sent to those who have registered for reimbursement through the program for classes beginning in 2013 to notify them of the possibility that reimbursement for classes may become taxable.

The potential taxation of tuition assistance does not apply to the Children’s Tuition Grant program, which is subject to different IRS regulations.

For more information about Duke’s Employee Tuition Assistance Program, please visit hr.duke.edu or call Duke Human Resources at 919-684-5600. http://www.hr.duke.edu/benefits/education/tuition_assistance/index.php

This entry was posted in Announcements and tagged , , , , , , . Bookmark the permalink.