Report your income from employee tuition reimbursement on a W-2 depending on the amount that was provided in educational assistance. If the assistance is $5,250 or less, do not include the reimbursement in Box 1 of a W-2 form. In that case, Box 1 should remain reserved for the employee’s:
- Wages
- Tips
- Other compensation
An employee can exclude up to that value of benefits each year.
In 2025, did you provide an amount valued at higher than $5,250 for educational benefits? Enter the amount that the employee must include in income with the W-2 form wages in Box 1. Expect any applicable employees to pay a tax on these higher reimbursements.
It is also worth noting that, ahead of 2025, roughly 76% of employees said they would likely continue working for an employer based on tuition reimbursement benefits.
People Also Ask
- Do I need to send a W-2 form for reimbursements to employees? – Yes, and employers should report substantiated employee business expense reimbursements in Box 12 of a relevant W-2 form.
- Do I need to send a 1099 form for reimbursements to employees? – Yes, it might be appropriate to issue a 1099 to some of your workers. Make sure to send a form when you reimburse them for expenses or if your company’s policy does not require receipts.
Save your data automatically with our W-2/1099 Forms Filer software whenever you access a new record or W-2 form. Download our free 1099-etc Demo software today and learn how you can report income efficiently and securely without exceeding your budget.