Recovery Act Tax Benefits Include Work-related
Education Deduction
September 11, 2009 (PLANSPONSOR.com) - The Internal
Revenue Service (IRS) has established an information center
describing the various tax credits, deductions, and savings
plans available under the American Recovery and Reinvestment
Act (ARRA) to assist with higher education
expenses.
The tax benefits include a business deduction for
work-related education expenses. Individuals who are
employees and can itemize deductions, may be able to claim
a deduction for the expenses paid for work-related
education.
The IRS information says that to claim a business
deduction for work-related education, an individual
must:
-
Be working;
-
Itemize deductions on Schedule A (Form 1040 or
1040NR) if an employee;
-
File Schedule C (Form 1040), Schedule C-EZ (Form
1040), or Schedule F (Form 1040) if self-employed;
and
-
Have expenses for education that meet the
requirements of Qualifying Work-Related
Education.
The IRS furthers explains that Qualifying Work-Related
Education is education that meets at least one of the
following two tests:
-
The education is required by the individual's
employer or the law to keep the employee's present
salary, status or job, and the required education must
serve a bona fide business purpose of the
employer.
-
The education maintains or improves skills needed
in the employee's present work.
However, even if the education meets one or both of the
above tests, it is not Qualifying Work-Related Education if
it is needed to meet the minimum educational requirements
of the employee's present trade or business or it is
part of a program of study that will qualify the employee
for a new trade or business.
When an employee gets more education than the employer
or the law requires, the additional education can be
Qualifying Work-Related Education only if it maintains or
improves skills required in present work. The education
could include refresher courses, courses on current
developments, and academic or vocational courses.
The IRS' information center for tax benefits on
education includes links to related sources, and audio file
for Podcast, and links to a YouTube video.
The information center is
here
.
Rebecca Moore
editors@plansponsor.com