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Originally Posted by mistertate
What is the benefit to the company? Is their tax less because the employee reports less earnings?
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I have not studied the code. What Mark says makes logical sense.
I have to assume the company can deduct the tuition reimbursements as a business expense up to the $5,250 even though the employee's income is shielded from the tax impact. It's an enticement benefit provided by the gub-ment to trigger investment/interest in education.
Beyond $5,250 the company still claims this expense with the employee shouldering the income tax through income. Still not a bad gig.