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Back To School 2014: Educational Assistance Benefits

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(UPDATE: The giveaway is now closed. We have our winner! See the comments for more info.)

It's not just the folks at Facebook Google that get tax-free perks as employment benefits: many employers offer a wide range of tax-free perks, including educational assistance benefits.

Under current law, employees can exclude from income up to $5,250 of educational assistance benefits. What this means, practically, is that payments made to you or on your behalf by your employer for tuition, fees and similar expenses, books, supplies, and equipment or any form of instruction or training that improves or develops are exempt from tax up to the $5,250. The value of those benefits isn't reported on your form W-2 nor is it reported on your income tax return.

There's nothing that says your employer can't provide you with benefits greater than $5,250 during the year. However, to the extent that benefits exceed that amount, the excess would be reportable on your form W-2 and on your income tax return. There's an exception to that rule: if any excess benefits qualify as a working condition fringe benefit, then it's still not includable. For purposes of the rule, a working condition fringe benefit is a benefit which, had you paid for it on your own, would be deductible as an employee business expense on your Schedule A.

Just like most of the other educational tax breaks, there's no double dipping: you can't use any of those expenses paid for by your employer to claim any tax deductions or credits, including the American Opportunity Credit and Lifetime Learning Credit.

But be cautious: just because it feels like a tax free perk doesn't mean it is one. To qualify as an educational assistance benefit, your employer must have a written plan and the plan has to meet certain requirements under the Tax Code. Under those requirements, the plan cannot be used to pay for meals, lodging or transportation; tools or supplies that you get to keep (textbooks are excluded); or courses involving sports, games or hobbies not related to your employment or part of your degree program. Unfortunately, those restrictions mean that most technology - including computers, printers and the like - is not included as an educational assistance benefit.

And that brings us to today's giveaway! One reader will receive Epson’s new WorkForce WF-3620. Boost productivity with the WorkForce WF-3620, a breakthrough all-in-one printer that gives you laser-like performance, powered by Epson’s new PrecisionCore printing technology. Whether burning the midnight oil with term papers or printing photos and diagrams for school reports, the WF-3620 produces print-shop quality color prints, sharp black and color text, and fast print speeds at up to half the cost of color laser. This wireless printer prints easily from tablets and smart phones.

To enter to win, just answer this question: If you could go back and take one course at college today, what would it be? I'll go first: Film editing.

Entries must be posted in the comments section for this blog post in the space below by 10:00 p.m. EST on October 3, 2014. It's just that easy. I’ll choose one winner randomly (using a number generator) out of all of the qualifying entries.

Be sure and read the fine print for more rules because, as you know, I’m a lawyer and I like rules:

  • Don’t panic if your comment doesn’t show immediately. If it goes to moderation because, for example, you’re new here, the time stamp on your comment is what counts. If you have difficulty registering, please send an email to blogadmin@forbes.com and copy me (tech@taxgirl.com) so that I can help if I need to/can.
  • I love my Twitter followers and my Facebook fans but for this particular giveaway, tweets and Facebook comments will not be counted. Ditto for emails. You must leave your comment on the blog at this post.
  • You can enter as many times as you like but you must leave a different answer each time you comment.
  • Offensive comments or comments that otherwise violate the comment policy will be deleted and will not be considered valid for purposes of the contest. Similarly, pingbacks and other links will be disregarded for purposes of the contest.
  • I will need your full name and your email address: be sure to use your real information when you register to leave a comment. I won’t publish your email address but I do need contact information for the winning entry. If you win and I can't reach you, it's a forfeit.
  • Due to shipping considerations, you must have a valid United States address. Sorry, Canada, eh?
  • I respect your privacy and I will not send you anything unrelated to your entry in this contest. By entering the contest, you agree that I may post any part or all of your submission including your name as a part of the contest announcements or promotions, with the exception of your email address.
  • Like Judge Judy, my determination is final.
  • Prizes are provided directly by our sponsors and are not exchangeable or redeemable for other prizes. Sponsors do not pay for placement and do not receive any compensation for contributions – neither do I! I have no affiliation, paid or otherwise, with any of our sponsors.
  • If you aren't allowed to participate in giveaways because of the laws in your state or your age or an agreement you've made with your mother, consider this giveaway not applicable to you. In other words: void where prohibited or restricted.
  • Finally, the giveaway is about me, me, me. It’s not affiliated with or endorsed by Forbes. So leave them out of it, okay?

Comment away! And thanks for participating in Back To School 2014!

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