If Check goes straight to tuition

amother

Aquamarine

Tue, Aug 29 2017, 2:28 pm

Amarante wrote:

It is income. Why in the world wouldn't it be considered to be income? Tuition isn't tax deductible and therefore just because you are paying for tuition in a different manner has no impact on the deductibility.

At some point if the IRS bothers to audit your tax return, you would be liable for the taxes plus interest and could well also be on the hook for penalties.

If your employer is making that direct payment and not reporting the amount as paid to you by the IRS, they are also committing tax fraud. How is your employer reporting the amount paid to the school. Are they deducting it as a corporate charitable contribution. Charitable contributions can't be designated for an individual so if they are paying the school and stipulating it is on behalf of a specific individual, the school is also committing tax fraud by providing documentation of a legal charitable contribution by your employer.

This has been discussed in several threads.

The employer (must be a school) would deduct the amount paid to the other school as an employee benefit, which is what it is.

working hard

Tue, Aug 29 2017, 4:58 pm

Thank you for all the helpful replies. I listened to the webinar on Agudah's website and now have a much better understanding of the rules. Now I know what I need to do so that everything is legal instead of a bunch of confusing hearsay.

amother

Aquamarine

Tue, Aug 29 2017, 4:59 pm

working hard wrote:

What do you need to do?

33055

Tue, Aug 29 2017, 5:51 pm

amother wrote:

The employer (must be a school) would deduct the amount paid to the other school as an employee benefit, which is what it is.

If I remember correctly, it has to be offered to all the employees of the class. It is not that your salary goes to tuition. Your salary would be the same regardless of whether you use the benefit or not.

I reiterate to see an accountant.

amother

Maroon

Tue, Aug 29 2017, 6:14 pm

working hard wrote:

The main reason I asked for help here is that we cannot afford to consult with an accountant right now.

Is there an accountant at your workplace?

33055

Tue, Aug 29 2017, 6:23 pm

working hard wrote:

The main reason I asked for help here is that we cannot afford to consult with an accountant right now.

Are you sure you can afford NOT to consult an accountant? I strongly recommend you do.

I don't know if your benefit is kosher. I suspect it is not which is why I recommend speaking with your own.

This benefit cam be kosher as the other poster said, but it must be applied evenly.

amother

Maroon

Tue, Aug 29 2017, 6:32 pm

Squishy wrote:

OOC, what does evenly mean? That all the employees are given the option of using part of their salary towards tuitions? Or that every single employees must take the benefit with the same amount across the board?

I'm pretty sure that it is totally kosher. I know reputable places (aka not small heimish schools) that do it and I can't imagine them taking the risk if it wasn't fully kosher v'yashar.

amother

Pumpkin

Tue, Aug 29 2017, 7:03 pm

The problem is that this is reduction of income when it's meant to be a benefit on top of your income. If it's your entire salary it can't be justified as a benefit so if you're audited and they discover you worked for the school you'll have an issue.

mommy3b2c

Tue, Aug 29 2017, 7:03 pm

Amarante wrote:

I believe you are wrong. If the money goes directly for tuition, it is not taxable.

ra_mom

Tue, Aug 29 2017, 7:14 pm

Only if the salary is coming from a school and going to another school to pay for tuition (can be different schools) can the money be non taxable.
Regular salary being paid to school tuition is still taxable.

amother

Maroon

Tue, Aug 29 2017, 7:21 pm

ra_mom wrote:

This. (I specifically wrote that it pertains if you work in a school.)

fraimal

Tue, Aug 29 2017, 7:28 pm

its 100% legal. it just needs to be done the right way by the school
see links below for more info (got them from google search)

http://legalsupportservicesllc.....e.pdf

http://www.aacs.org/assets/Leg.....s.pdf

http://legalsupportservicesllc.....e.pdf

Hashem_Yaazor

Tue, Aug 29 2017, 7:47 pm

QTR is completely legal and kosher. It's good to have it written in the contract as an employee benefit, and it is not taxable. It's a benefit only offered for employees who work in an educational institution to pay tuition to that or another educational institution. It's not that complicated.

33055

Tue, Aug 29 2017, 9:52 pm

Hashem_Yaazor wrote:

It becomes complicated when it is not done correctly. If teachers make $30,000 a year, the school may not reduce one teacher's salary by $15,000 and pay tuition directly. They would have to pay all teachers $15,000 regardless if all teachers could use the $15,000 for tuition. If a
teacher couldn't benefit from the fringe benefit, the teacher could not take a higher salary instead.

33055

Tue, Aug 29 2017, 10:42 pm

Hashem_Yaazor wrote:

As long as it's in the contract delineating what QTR benefits are as well as salary and other benefits, it should be fine. It's not about a teacher getting a higher salary for not using QTR but rather for a salary being lowered for someone who is.

I don't think you are correct. It must be the same as across the class. It can not be individualized. Everyone in the class must have the same benefit.

Your last sentence doesn't make sense. A teacher getting a higher salary for not using the benefit is the same as a salary being lowered for someone who is.

Right now with the climate going on with the schools being under a microscope, it isn't the time to play games in NY. I have no idea where OP is, but this needs to be done properly to pass the sniff test.

shyshira

Tue, Aug 29 2017, 10:51 pm

Squishy wrote:

You are incorrect regarding the requirement that everyone get this benefit. You are confusing it with other programs.

33055

Tue, Aug 29 2017, 11:27 pm

shyshira wrote:

You are incorrect regarding the requirement that everyone get this benefit. You are confusing it with other programs.

Everyone in the class must be treated the same. You can't single out certain members of the class. I am not confusing this with other programs. You are the one confused.

You do realize the logical policy implications of why I am right?

shyshira

Tue, Aug 29 2017, 11:28 pm

Squishy wrote:

What class are you taking about?