7 tax-free benefits for employees
During tax season, employees are sharply reminded of how much cash Uncle Sam takes from their paychecks. Many workers already take advantage of benefits such as tax-exempt health savings accounts, group term-life insurance and even tax-deferred benefits in retirement plans. Some fringe benefits, however, are lesser known for their tax-exempt status. Here are seven tax-free benefits that keep cash in employees’ pockets, as well may provide attractive deductibles to companies. (Images: Thinkstock)
7. Qualified educational assistance
When an employer pays for tuition or educational expenses for an employee under an educational assistance plan, the costs are excludable from employee wages, if certain IRS requirements are met. Education may be at undergraduate or graduate level and is not required to be job-related. However, an employer must have a written plan, which does not offer alternative benefits to education. The employee cannot receive more than $5,250 per calendar year from their employer. The plan also cannot discriminate in favor of highly compensated employees.
