We have set up an educational assistance plan under 127. As such, reimbursements for qualified expenses are nontaxable. I understand that graduate level courses cannot qualify for tax free treatment under 127. If you continue to offer graduate level courses under the plan (so that you treat those amounts as wages), will it jeopardize the tax free status of other qualified expenses provided under the plan?

My understanding of IRC 127 is that the tax free treatment is limited by type and dollar amount. anything not specifically excluded is taxable income, reportabe as W-2 wages, It does not otherwise impact the program.