Employee Educational Assistance

Employee Educational Assistance

NSPE Position
NSPE supports making the tax exclusion for employer-provided educational assistance, including graduate coursework, a permanent component of the Internal Revenue Code.

Section 127 plays an important role in assisting engineers in their career-long education. Formal courses are an essential component of an engineer's continuing professional development, particularly given the rapid pace of technological change.

Background
Section 127 of the Internal Revenue Code allows up to $5,250 in tuition reimbursements and other forms of employer education assistance (e.g., books, supplies, and equipment) to be exempt from income and employment taxes even if the education does not qualify as a deductible business expense.

Undergraduate course work is covered. Graduate-level courses were not covered between June 30, 1996, and December 31, 2001. The Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16) reinstated the inclusion for graduate-level courses that begin after December 31, 2001. The inclusion is extended through December 31, 2010.


NSPE References
NSPE Position Statement on Competitiveness – 7/99
NSPE Professional Policy No. 155 on Competitiveness – 7/01I. Fundamental

Issue Brief and Position: