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CAROL A. ROBINSON, TAX CONSULTANT AND PRESIDENT OF FASTAXINCOME TAX SERVICES INC. (800-211-5701), says you might be in for a tax refund if your employer paid for courses you took or if you, as an employer, paid for courses for your employees. That’s because a tax code that excluded up to $5,250 in employer-provided educational assistance from worker’s income reported to the government has been reinstated retroactive to January 1, 1995. However, this does not apply to graduate courses beginning after June 30, 1996.
If the money your employer paid for courses is included in your 1995 reported income, you can file an amended return, 1040x or 843, along with a corrected W2C form to obtain a refund. Further, employees and employers are both entitled to a refund of the Social Security and Medicare taxes for both 1995 and 1996. Employees must obtain this refund from their bosses, and employers must make adjustments in their quarterly federal tax returns.