What are the requirements of an education assistance program?

An education assistance program is a great way to offer education benefits to employees. Employer tuition assistance programs have proven effective in attracting and retaining employees, as well as creating a more educated workforce. When establishing an employer tuition reimbursement program, it is important to understand its requirements.

What is employer-provided educational assistance?

An education assistance policy is a plan established by an employer where an employer provides education assistance to employees. This can be through various channels, such as tuition reimbursement, student loan repayment, on-the-job training, etc. Many employers today are offering their employees some form of education assistance to increase employee satisfaction and retention rates.

What are the requirements of an education assistance program?

There are a several important requirements for a qualified assistance program to be successful. Within these programs, “education assistance” is defined as an employer paying for education expenses for an employee, or an employer allocating education to an employee. However, employer-provided education benefit programs do not include the payment of supplies (other than textbooks), meals, lodging, transportation, etc. All education assistance programs must be provided to employees under a written plan, and must meet certain legal requirements, such as a non-discrimination policy. 

Are employer-provided education assistance programs tax-free?

Under section 127 of the IRC, employers can offer employees up to $5,250 in education assistance annually without being taxed. Tax-free employer-provided education assistance may also be job-specific. In order for an education assistance program to qualify as job-related, it must support or improve skills required for the employee’s current job.


When designing an employer-provided education assistance program, it is necessary to consider the various requirements of these in-demand benefit programs. Education assistance programs are an extremely valuable tool for employers, and they require attentiveness when developing them to ensure their success for both employer and employee.

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