Legal Question in Employment Law in Illinois
My employer sent out notification that employees who received tuition assistance benefits in 2009 will be responsible for paying taxes on all courses in excess of $5200. We were not informed of this change or did we receive any amendments to our employee handbook prior to receiving this notification. From my research, they have not utilized this policy in the past years and they should have notified their employees of this change. This change affects the company employees all around the world and I have come across employees oweing as much as $3500 to the IRS because of this mishap. Is this a legal practice? Is this practice ethical considering that they did not inform the employees of this drastic chang?
1 Answer from Attorneys
I don't know for sure but this may just be their trying to let you know what current tax law is even thought it's your obligation to know what the tax consequences of taking this kind of assistance are, not the employer's. So first make sure they're not just doing that. Alternatively, you may qualify for one of the several federal tax breaks for tuition. Again make sure they're not just letting you know there is a limit per tax code and that if you have any other breaks it's over that amount or you are liable for tax. ON THE OTHER HAND....if they are in fact imposing a new limitation that was not already part of applicable tax law, you have a choice: follow their notice and pay the tax, refund the portion over the $5,200, or write them that it is contrary to the program (you better have the entire program details in writing) and if it continues next year would do this but expect them to handle the taxes this year. But again make sure you are completely up on the tax consequences and obligations first. For all you know they might consider this a slap in the face and if you're not otherwise protected, could have adverse employment consequences...... GOOD LUCK.