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Does the new Educational Benefit Tax Exemption Form apply to you? Should you submit a form for the course(s) when you receive a UET voucher?
The Union Education Trust has prepared some resources to help you make your decision. If you believe you may exceed the $ 5,250 limit in any calendar year, then you may wish to take advantage of the resources.
Remember, any amount over $5,250 paid for non-work related educational assistance is considered income and is subject to income tax. The key is that if it is work-related educational assistance, it is not taxable in any amount.
Use the flow chart to see if your course meets the IRS criteria. Your HR representative will make the final decisions if your course meets the IRS criteria so don’t be afraid to ask for his or her help.
In general, the educational course should maintain or improve skills needed in your present work, but not be needed for minimum educational requirements of your present trade or business. It also can’t be a program of study that will qualify you for a new trade or business.
If you choose to apply, here is what you do
If you believe that the course is work related, fill out the Educational Benefit Tax Exemption Form developed by UET.
Applying for the tax exemption is a simple three-step process that should be done at the same time you apply for your voucher or reimbursement: 1. Complete the form; 2. Take the form to your agency’s HR department for the signature; and 3. Submit the completed form with the signature to UET within 30 days from the date you apply for the voucher or reimbursement.
The UET has posted the tax exemption form and made it available for downloading. Contact the UET Customer Service Center by phone (1-866-436-7900) or e-mail (support@uedtrust.org) to have a form mailed.
Take the form, along with any documentation that supports your claim that the course or training is work related, to the designated state HR representative at your agency. This person will sign the form as long as it complies with the IRS guidelines laid out in IRS Publication 970. This is the same publication that has the flow chart.
Then, submit the completed Educational Benefit Tax Exemption Form to UET. You may want to submit it at the time you apply for a voucher or reimbursement. The UET must receive the form – complete with your signature and the signature from your agency’s HR representative – no later than 30 days from the date when the application for the voucher or reimbursement was received.
The UET will submit a monthly report to the State showing all educational expenditures for courses that are not identified as work related. The State will use this information along with any educational assistance you may receive from your agency to determine if you have a tax liability. If it is determined by the State that you have a tax liability, it will withhold taxes from your paycheck.
If the UET receives an Educational Benefit Tax Exemption Form for the voucher you receive, then the educational expenditure will not be submitted to the State and you will not incur a tax liability.
| How to Apply? | 1. COMPLETE the Educational Benefit Tax Exemption Form when you apply for UET voucher or reimbursement. | 2. TAKE the Educational Benefit Tax Exemption Form to your agency’s HR department for signature. | 3. SUBMIT your signed Form to UET within 30 days from the date you apply for voucher or reimbursement. |
Download and print the Educational Benefit Tax Exemption Form
Download and print the FAQ Sheet & Flowchart