Tax Tips for Higher Education
Happy Thanksgiving!
Please know that we are Thankful for each and every one of you. We pray that you will have a blessed Thanksgiving with family and friends. We are grateful for the work you do to bless those around you and further the Kingdom of Jesus.
Psalm 118:28-29
You are my God, and I will praise you;
you are my God, and I will exalt you.
Give thanks to the Lord, for he is good;
his love endures forever.
HAPPY THANKSGIVING from Tax Tips!
Holiday Gift Cards for Employees
ISSUE:
Although actual turkeys and hams given to employees are generally non-taxable, holiday gift cards are another story.
SITUATION:
Idaho Bible College & Seminary (IBCS) is a private college exempt under Internal Revenue Code section 501(c)(3) and section 170(b)(1)(A)(i). They are not required to file Form 990 annually.
New Tax Reform and Educational Assistance
ISSUE:
The new tax reform bill – H.R. 1 – has some negative issues for higher education. Chief among them are the repeal of tuition and education “assistance” programs.
SITUATION:
Troas Bible College (TBC) is a private college exempt under Internal Revenue Code section 501(c)(3) and section 170(b)(1)(A)(ii). The past two “Tax Tips” have covered TBC’s “tuition assistance program” under Internal Revenue Code section 117(d) and the potential benefits of also having an “educational assistance” plan under I.R.C. section 127 plan.
Qualified Educational Assistance
ISSUE:
A qualified tuition education assistance “program” could be something that would benefit your institution – and Congress may be sweetening it!
SITUATION:
Troas Bible College (TBC) is a private college exempt under Internal Revenue Code section 501(c)(3) and section 170(b)(1)(A)(ii). TBC has a written “tuition assistance program” under Internal Revenue Code section 117(d), but has not contemplated the potential benefits of also having a “Section 127” plan, which could cover graduate-level courses.
Qualified Tuition Reductions
ISSUE:
A qualified tuition reduction “program” must meet certain criteria in order to pass IRS muster.
SITUATION:
Troas Bible College (TBC) is a private college exempt under Internal Revenue Code section 501(c)(3) and section 170(b)(1)(A)(ii). TBC has a written “tuition assistance program” under Internal Revenue Code section 117(d).
The TBC Controller has recently attended a workshop on these programs at a conference and is concerned about TBC’s “plan.” They ask us about graduate level courses and about “non-discrimination” requirements.
Section 117 allows tuition assistance for degree candidate employees (and some “family members”) under a written plan for courses under the graduate level. There is an exception for “grad assistants.”