Teacher in yeshiva gets checks for child’s yeshiva?

amother

Thu, Aug 06 2020, 7:54 pm

Could someone explain this to me? I found out someone I know who’s a teacher in one yeshiva is getting checks from the yeshuva they teach in, made out to their child’s yeshiva along with his salary checks. What does this mean? Doesn’t want to declare income so the yeshiva and the teacher have a deal to make checks instead for the teacher’s child’s tuition at a different yeshiva? Anyone heard of this? How is it legal and not stealing?

amother

Jade

Thu, Aug 06 2020, 7:59 pm

This is called QTR (Qualified Tuition Reduction) and is perfectly legal as long as it is done properly.

ETA: It would be prudent as well as DLKZ to investigate something before assuming it is illegal.

amother

Mustard

Thu, Aug 06 2020, 8:00 pm

My husband works in a college and this is a benefit that is available to him. A certain portion of his salary is set aside pre tax to send checks to our children's schools for their tuition. I'm sure his workplace would not be doing something illegal. I once heard that it is a benefit only available to people who work in educational institutions.

amother

Jade

Thu, Aug 06 2020, 8:01 pm

amother [ Mustard ] wrote:

Yes, this.

amother

Violet

Thu, Aug 06 2020, 8:02 pm

It's called QTR. I don't know the details, since my kids aren't old enough yet, but the basic idea is it allows you to pay tuition with pretax money by having the school pay another school to educate your child.

amother

Oak

Thu, Aug 06 2020, 8:05 pm

Yes, I work in a really upstanding, "by the law" institution and we have a QTP option. I can dedicate up to 40% (or 60%? not sure) of my salary toward my child's tuition, which comes out of my salary pre-tax. It's not even recorded on my W2. It's most certainly legal because there is absolutely no way my school would do something that's not by the letter of the law.

wtvr

Thu, Aug 06 2020, 8:06 pm

amother [ Jade ] wrote:

This.

Legal for one school to pay another on a staff member's behalf.

amother

Mint

Thu, Aug 06 2020, 8:41 pm

amother [ Oak ] wrote:

It’s actually not legal when done that way. It’s only legal when done as a bonus/fringe benefit in addition to salary not in lieu of salary.
It’s pretty common to do it the way your school does I would even say that most do it that way including some big name institutions and the IRS has yet to make an issue of it but Agudah is very vocal about it being wrong. You can read this from their attorney if you’d like.
http://legalsupportservicesllc.....e.pdf

amother

Vermilion

Thu, Aug 06 2020, 8:56 pm

Yes, my relative used to do auditing for the federal government, and whenever he'd hear about frum places doing this, he'd say it is indeed against the law.
That said, the IRS has bigger fish to fry, so that's why it's been overlooked for the most part. But all it takes is one audit for some unrelated reason, and people can end up in hot water. Those who do it, do it at their own risk.

cnc

Thu, Aug 06 2020, 8:59 pm

amother [ Vermilion ] wrote:

Non Jewish/ frum places do it as well.
It is completely legal .

Hashem_Yaazor

Thu, Aug 06 2020, 9:01 pm

QTR is legal, yes. But not as a portion of someone's salary... Rather as a perk included in the total compensation package. If done right, it's 109% legal and kosher. You just have to make sure to do it right.

cnc

Thu, Aug 06 2020, 9:16 pm

Hashem_Yaazor wrote:

Right .

amother

Vermilion

Thu, Aug 06 2020, 9:22 pm

Hashem_Yaazor wrote:

,
Those were NOT the arrangements my relative was talking about. The schools were writing out paychecks to be payable to other schools, instead of the employee. And vice versa with the other schools. In lieu of salary. It was done quite regularly but perhaps people are more aware now. Hopefully.

amother

Violet

Thu, Aug 06 2020, 9:40 pm

amother [ Vermilion ] wrote:

In my school it’s negotiated to receive qtr at a decrease in salary. Our contracts are written to exclude the money that goes towards qtr. So if I was offered $50,000 and I want 20,000 qtr, my salary on my contract is 30,000 plus 20,000 qtr to whatever school.

amother

Vermilion

Thu, Aug 06 2020, 9:49 pm

amother [ Violet ] wrote:

If I am reading your post correctly, while that may be technically legal it is not really ethical. Not impressed with this workaround.