Back to Small Business Job Protection Act Home Page
[Congressional Record: August 1, 1996 (House)]
[Page H9568]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
TITLE I--SMALL BUSINESS AND OTHER TAX PROVISIONS
* * *
Subtitle B--Extension of Certain Expiring Provisions
* * *
SEC. 1202. EMPLOYER-PROVIDED EDUCATIONAL ASSISTANCE PROGRAMS.
(a) Extension.--Subsection (d) of section 127 (relating to
educational assistance programs) is amended by striking
``December 31, 1994.'' and inserting ``May 31, 1997. In the
case of any taxable year beginning in 1997, only expenses
paid with respect to courses beginning before July 1, 1997,
shall be taken into account in determining the amount
excluded under this section.''.
(b) Limitation to Education Below Graduate Level.--The last
sentence of section 127(c)(1) is amended by inserting before
the period the following: ``, and such term also does not
include any payment for, or the provision of any benefits
with respect to, any graduate level course of a kind normally
taken by an individual pursuing a program leading to a law,
business, medical, or other advanced academic or professional
degree''.
(c) Effective Dates.--
(1) Extension.--The amendment made by subsection (a) shall
apply to taxable years beginning after December 31, 1994.
(2) Graduate education.--The amendment made by subsection
(b) shall apply with respect to expenses relating to courses
beginning after June 30, 1996.
(3) Expedited procedures.--The Secretary of the Treasury
shall establish expedited procedures for the refund of any
overpayment of taxes imposed by the Internal Revenue Code of
1986 which is attributable to amounts excluded from gross
income during 1995 or 1996 under section 127 of such Code,
including procedures waiving the requirement that an employer
obtain an employee's signature where the employer
demonstrates to the satisfaction of the Secretary that any
refund collected by the employer on behalf of the employee
will be paid to the employee.
[End of section 1202]
* * *
[Conference Report follows]
I. SMALL BUSINESS AND OTHER TAX PROVISIONS
A. Small Business Provisions
* * *
2. Employer-provided educational assistance
(Sec. 1202 of the House bill and the Senate amendment.)
Present and prior law
For taxable years beginning before January 1, 1995, an
employee's gross income and wages did not include amounts
paid or incurred by the employer for educational assistance
provided to the employee if such amounts were paid or
incurred pursuant to an educational assistance program that
met certain requirements. This exclusion, which expired for
taxable years beginning after December 31, 1994, was limited
to $5,250 of educational assistance with respect to an
individual during a calendar year. The exclusion applied
whether or not the education was job related. In the absence
of this exclusion, educational assistance is excludable from
income only if it is related to the employee's current job.
The provision extends the exclusion for employer-provided
educational assistance for taxable years beginning after
December 31, 1994, and before January 1, 1997. After December
31, 1995, the exclusion would not apply with respect to
graduate education.
To the extent employers have previously filed Forms W-2
reporting the amount of educational assistance provided as
taxable wages, present Treasury regulations require the
employer to file Forms W-2c (i.e., corrected Forms W-2) with
the Internal Revenue Service.\26\ It is intended that
employers
[[Page H9620]]
also be required to provide copies of Form W-2c to affected
employees.
---------------------------------------------------------------------------
\26\ Treasury regulation section 31.6051-1(c).
---------------------------------------------------------------------------
The Secretary is directed to establish expedited procedures
for the refund of any overpayment of taxes paid on excludable
educational assistance provided in 1995 and 1996, including
procedures for waiving the requirement that an employer
obtain an employee's signature if the employer demonstrates
to the satisfaction of the Secretary that any refund
collected by the employer on behalf of the employee will be
paid to the employee.
Because the exclusion is extended, no interest and
penalties should be imposed if an employer failed to withhold
income and employment taxes on excludable educational
assistance or failed to report such educational assistance.
Further, it is intended that the Secretary establish
expedited procedures for refunding any interest and penalties
relating to educational assistance previously paid.
Effective date.--The provision is effective with respect to
taxable years beginning after December 31, 1994, and before
January 1, 1997.
Senate amendment
The provision is the same as the House bill, except that
the exclusion is extended for an additional year, through
December 31, 1997, and the Senate amendment does not preclude
application of the exclusion to graduate courses.
Effective date.--The provision is effective for taxable
years beginning after December 31, 1994, and before January
1, 1998.
Conference agreement
The conference agreement follows the House bill, with the
following modifications. The exclusion expires with respect
to courses beginning after May 31, 1997. The exclusion for
graduate courses applies in 1995. In 1996, the exclusion for
graduate courses does not apply to courses beginning after
June 30, 1996.
Back to Small Business Job Protection Act Home Page
 |
URL of this page: http://benefitslink.com/laws/small_biz/1202.html · This page last modified: Monday, October 31, 2005 · Webmaster: Dave Baker (click) · © 2009 BenefitsLink.com, Inc.
(contact the webmaster for reprint permission) · Linking: Feel free to link directly to this page, even without specifically crediting BenefitsLink ® as its source. Glad you're here! · Privacy Policy |
