Each of the numbered items below is accorded only one of the following lettered treatments. Use the existing law as it applies to the current year, match the best answer to the statements below.
-Michelle's employer pays for her graduate school classes. Tuition during the year totals $2,500 (her employer does not have a qualified plan).

Question

Quizplus · Accepted Answer

Under current tax law, if an employer pays for an employee's education and the payments do not fall under a qualified educational assistance program (which has an exclusion limit of $5,250 per year), the amounts paid are considered taxable income to the employee. Since it's mentioned that Michelle's employer does not have a qualified plan, the $2,500 paid for her graduate school classes would be fully included in her gross income.

Each of the Numbered Items Below Is Accorded Only One