Extending Employer-Provided Tuition Assistance

Section 127 of the U.S. tax code, which allows an employee to exclude from income up to $5,250 a year in employer-provided tuition assistance for undergraduate and graduate-level courses, will expire at the end of the year unless Congress takes action to extend the provision. If the current provision expires, all graduate level tuition remission will be taxable for all employees, not just dependents. In addition, tuition remission for undergraduate level tuition remission (currently exempted for employees and dependents) would be taxed.

This provision was first established in 1978 and has been extended by Congress several times, most recently in 2001. This year Representative Earl Pomeroy (D-ND) and Representative Sam Johnson (R-TX) introduced the Employee Educational Assistance Act of 2010 (H.R. 5600), which would make the provision permanent. Senator Chuck Grassley (R-IA) introduced a similar bill (S. 2851) in the Senate.

You may show your support of these bills that would permanently extend employer-provided education assistance by contacting your members of Congress. To do this, visit https://www.capwiz.com/cpepea/home/ to write or call your member of Congress.


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