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amother

Maroon

Tue, Aug 29 2017, 11:30 pm

Squishy wrote:

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?

I think you're the one confused actually. Why don't you consult an accountant? (I did.)

33055

Tue, Aug 29 2017, 11:33 pm

shyshira wrote:

What class are you taking about?

A class of employees. You can't discriminate.

shyshira

Tue, Aug 29 2017, 11:33 pm

This is the language of the limitation.

117(d)
(3) Reduction must not discriminate in favor of highly compensated, etc.

Paragraph (1) shall apply with respect to any qualified tuition reduction provided with respect to any highly compensated employee only if such reduction is available on substantially the same terms to each member of a group of employees which is defined under a reasonable classification set up by the employer which does not discriminate in favor of highly compensated employees (within the meaning of section 414(q)). For purposes of this paragraph, the term “highly compensated employee” has the meaning given such term by section 414(q).

Last edited by shyshira on Tue, Aug 29 2017, 11:40 pm; edited 1 time in total

33055

Tue, Aug 29 2017, 11:36 pm

amother wrote:

I think you're the one confused actually. Why don't you consult an accountant? (I did.)

I did much better just now. I just read the IRS regulations. You can't do it unless the plan offers it to everyone.

I had discussed this with an accountant last May, but I like to double check myself before I write a post so certain.

amother

Maroon

Tue, Aug 29 2017, 11:38 pm

Squishy wrote:

Of course the plan has to offer it to everyone. But does that mean that every single employee needs to take the exact same amount of their salary towards tuition? Because that's how your previous posts are coming across.

33055

Tue, Aug 29 2017, 11:38 pm

shyshira wrote:

This is the language of the limitation.

(3) Reduction must not discriminate in favor of highly compensated, etc.
Paragraph (1) shall apply with respect to any qualified tuition reduction provided with respect to any highly compensated employee only if such reduction is available on substantially the same terms to each member of a group of employees which is defined under a reasonable classification set up by the employer which does not discriminate in favor of highly compensated employees (within the meaning of section 414(q)). For purposes of this paragraph, the term “highly compensated employee” has the meaning given such term by section 414(q).

This is what I am saying. All members of the group must get the same benefit.

33055

Tue, Aug 29 2017, 11:42 pm

amother wrote:

You don't get it. This NOT how this program works.

Last edited by 33055 on Tue, Aug 29 2017, 11:44 pm; edited 1 time in total

shyshira

Tue, Aug 29 2017, 11:42 pm

Squishy wrote:

This is what I am saying. All members of the group must get the same benefit.

I posted the code, not the regulation.

If the benefit isn't offered to the group of highly compensated employees - there is no requirement to offer it to everyone.

33055

Tue, Aug 29 2017, 11:44 pm

shyshira wrote:

I posted the code, not the regulation.

If the benefit isn't offered to the group of highly compensated employees - there is no requirement to offer it to everyone.

You can't offer it to some teachers and not others.

You can offer it to principals or janitors but you must offer it to all principals or janitors.

amother

Maroon

Tue, Aug 29 2017, 11:47 pm

Squishy wrote:

You don't get it. This NOT how this program works.

Very possible.

amother

Maroon

Tue, Aug 29 2017, 11:48 pm

Squishy wrote:

You can't offer it to some teachers and not others.

You can offer it to principals or janitors but you must offer it to all principals or janitors.

This is saying something entirely different than your posts at 9:52 and 10:42. I'm not arguing with this point. Im arguing with your points in those posts.

33055

Tue, Aug 29 2017, 11:49 pm

amother wrote:

Very possible.

At this point, I don't think anyone else, besides me, on this thread gets how this program works either, so don't feel bad. (I think they are confusing tuition reduction with salary reduction. )

Hashem_Yaazor

Tue, Aug 29 2017, 11:55 pm

Public forum, changed my mind about posting.

Last edited by Hashem_Yaazor on Wed, Aug 30 2017, 12:21 am; edited 1 time in total

33055

Tue, Aug 29 2017, 11:56 pm

amother wrote:

This is saying something entirely different than your posts at 9:52 and 10:42. I'm not arguing with this point. Im arguing with your points in those posts.

I don't see what you mean. What am I datimg different?

Anyway, my whole point was that OP needs to consult with an accountant. The program must be administered properly. It does not sound like OP's program is quite kosher.

shyshira

Tue, Aug 29 2017, 11:56 pm

Squishy wrote:

At this point, I don't think anyone else, besides me, on this thread gets how this program works either, so don't feel bad. (I think they are confusing tuition reduction with salary reduction. )

(1) Its not a program
(2) There are no published regulations about it - other than non-discrimination regulations, generally.

A qualified tuition reduction that is provided on behalf of any “highly compensated employee” is excludable from income of that employee only if a qualified tuition reduction is available on substantially the same terms to each member of a group of employees that is defined under a reasonable classification that does not discriminate in favor of “highly compensated employees.Code Sec. 117(d)(3).

Without stating a preference, IRS has suggested that either of two tests can be used to determine if the nondiscrimination requirements are met. The first test (the DEFRA test) comes from the House Report for the Deficit Reduction Act of 1984; under it, if equal benefits are offered to different categories of employees, the plan is per se discriminatory if the greater benefits are limited to officers, owners, or the highly compensated. However, if the categories are based on “reasonable” factors, such as seniority and job description, the plan is not “per se” discriminatory. But where the favored group is comprised to a substantial degree of the prohibited groups (such as where 41% of the highly compensated are actually eligible, but only 2% of the others), the plan is discriminatory. The second test is the nondiscrimination test under Reg § 1.410(b)-4.

IRS also noted that when a plan is discriminatory, the benefits received by employees who are not highly compensated still qualify for the exclusion. Only the members of the proscribed group lose the exclusion entirely and are not entitled to exclude a reduced amount that would align them with benefits available to the nonfavored group.

IRS Letter Ruling 9041085.

Hashem_Yaazor

Wed, Aug 30 2017, 12:02 am

Public forum, changed my mind about posting.

Last edited by Hashem_Yaazor on Wed, Aug 30 2017, 12:11 am; edited 1 time in total

33055

Wed, Aug 30 2017, 12:03 am

Hashem_Yaazor wrote:

You are definitely wrong. It is a fringe benefit and not tied to salary. It most be part of a qualified plan.

Anyway, I really don't like saying you are wrong, but this is very bad advice. It is not how it works.

I just reviewed it again.

Last edited by 33055 on Wed, Aug 30 2017, 12:22 am; edited 1 time in total

shyshira

Wed, Aug 30 2017, 12:06 am

Hashem_Yaazor wrote:

What are you talking about that it can't be individualized?

In your example, teachers get $30,000 salary. That salary is applied across the board to teachers with X experience and Y hours/responsibilities.
QTR is offered as a benefit to anyone who wants to take up the school on that benefit.
Rabbi Smith is a zeidy with no tuition obligations, so he chooses to take all $30K in his paycheck.
Rabbi Jones is a young father who owes $15K in tuition, so he chooses to have his $30K divided in half, with 15K in paychecks and 15K as a QTR benefit.
There is no higher salary for Rabbi Smith, it's just that Rabbi Jones is taking less in paychecks. The school is laying out the same amount of money to the same type of teacher.

No - salary is salary. You can't opt out of salary (compensation for services performed) and into a benefit.

The school would need to reasonably assert that Rabbi jones is compensated for work performed at half the rate of Rabbi Smith.

33055

Wed, Aug 30 2017, 12:09 am

Hashem_Yaazor wrote:

I beg to differ. If you are the only one saying something the opposite of everyone else on this thread, don't you think it's time to investigate further? What experience do you have with QTR? Some of us on this thread seem to have prior knowledge about this benefit.

No, one cannot discriminate who is offered this benefit, but no one was implying anyone has any interest in discriminating. Whether an employee takes the benefit or not is a different story.

I also have prior knowledge of this.

Trust me, I can read code. If you want to discuss my professional training and experience, I will gladly exchange info in a p.m.

I don't like saying you are wrong. I also don't like having wrong information out there.

You can't reduce salary to gain the benefit.

I just reviewed two papers on this. I checked myself and then checked again because I am saying the opposite of what everyone else is saying.

33055

Wed, Aug 30 2017, 12:12 am

shyshira wrote:

So now you are agreeing with me?

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