I work for a small company that has agreed to pay part of my tuition for my MBA. I am considered as a full time student in the program.

My company is paying directly to the school.

The company doesn't know how to handle the taxes on the money. Do they do regular withholding on this money, etc?

Any ideas?

6/19/2007 4:40:31 PM

http://www.irs.gov/publications/p970/

6/19/2007 4:48:43 PM

I haven't received my check from my company yet, but it is typically set up as a tuition reimbursement program. You provide receipts and are reimbursed just as if you had taken a trip or bought something for the company. Its not a bonus, so it shouldn't have regular withholdings. Tax wise, it should be a business expense for them, and nothing for you. If my stupid school ever decides to post my final grade (its been 3 weeks since I finished the classes) I'll finally get a reimbursement and then I'll let you know what they actually did.

6/19/2007 7:16:18 PM

the way tuition reimbursement works (with my company anyways) is that you take the class and pay for it yourself. when your class is over, you provide proof of payment as well as your grade, and then you receive a reimbursement check for whatever portion they agreed to pay. in my case, it's 50% tuition and fees as long as i score a C or better in the class.

^yes, the company will write off the payment to you as an expense, so there will be no taxes involved.

[Edited on June 19, 2007 at 7:24 PM. Reason : .]

6/19/2007 7:23:17 PM