Employer Help With College Tuition By: Frank Friday Esquire Director The Jefferson County Clerk’s Office still offers limited funding of educational assistance to employees for work-related classes. But like most smaller businesses and government agencies, JCCO has had to carefully ration this benefit, given the tight budgets we work under. Recent changes in the tax laws, however, have made it attractive for large private companies to put more emphasis in this area; there are even tax breaks for anyone who is self- employed as a sideline. In our community, the biggest employer, UPS, is well known for its education benefits. Even part-time UPS employees are immediately eligible for up to $25,000 in life-time tuition assistance. But a lot of companies not known for being so generous are also jumping on the band wagon. This year, McDonalds will pay up to $2,500 a year for any employee on the job more than 90 days, to go to a trade school or college. Given the tight labor market, just about any big national company is now offering worthwhile college assistance. But as with anything related to taxes, there are some rules, and here are couple to keep in mind. First, employers can only offer up to $5,250 every year in tax free help. Above that is considered taxable income to the employee. To be tax free, the employer must have a written assistance plan. The course-work does not have to be work related, but only basic tuition costs are covered. Expenses for things like meals, lodging, transportation, tools, or supplies (other than textbooks) that you can keep after completing the course of instruction, and courses involving sports, games, or hobbies, are typically not tax free. So, any employer money spent there, again, might be considered taxable income. Second, even if your employer doesn’t offer tuition help, you may still be able to deduct education costs, but this must be work related education. You are eligible for this deduction if the coursework is required by your employer or the law, to keep your present salary, status, or job, or if the education maintains or improves skills needed in your present work. Provided, it is not needed to meet the minimum educational requirements of your present trade or business and is not a program of study that will qualify you for a new trade or business. You can also deduct travel costs from work to school for work related education. To take these deductions, you need to either itemize expenses on Schedule A, or if you have self- employment income, take these deductions on Schedule C of the 1040. It’s a bit more work but given the high cost of education these days it makes sense to explore every avenue for help, even our complicated federal tax code. 2 people to want more local choices in their banking; therefore, credit unions have been given greater powers to expand membership affinity to broad geographic locations. The two biggest credit unions in our area are L&N Federal, started by the famous railroad, and Park Federal, started at GE’s Appliance Park. Today, just about anybody who lives in Metro Louisville qualifies for membership in several federal credit unions like these. The biggest credit union of all is Navy Credit, with 8 million members and offices in every state. Anybody who has served in the military or is related to a member may join. Overall, 110 million Americans are credit union members. With the success of credit unions, some traditional banks have complained about these “non-profits” encroaching on their business, but that probably is a wasted effort. Fewer than a dozen credit unions become insolvent every year, and these are tiny operations which insurance can handle. No doubt in the future we will continue to move to a “two- tier” financial system where banks will concentrate on big financial customers and consumers will rely more on “non- bank” financial entities like credit unions. The Growing Role of Credit Unions Continued from page 1