It depends. Up to $5,250 of employer paid educational assistance provided to employees is excluded from taxable wages according to IRC §127. Graduate level courses are included in this exclusion. Expenses include the cost of books, equipment, fees, supplies, and tuition. The exclusion does not apply to the cost of education involving sports, games, or hobbies, unless the education has a reasonable relationship to the employer’s business or is required as part of a degree program. Excludable expenses do not include the cost of tools or supplies (other than textbooks) that the employee is allowed to keep at the end of the course, nor do they include the cost of lodging, meals, or transportation. Note: If benefits exceed $5,250, the cost of education may still be excludable (see below).
Pursuant to IRC §132(d), the value of property or services provided to employees so that the employee can perform his or her job is excluded from taxable wages.
For purposes of this IRC section, the term “working condition fringe” means any property or services provided to an employee of the employer to the extent that, if the employee paid for such property or services, such payment would be allowable as a deduction under IRC section 162 or 167.
If your employer determined that the balance of the educational assistance qualified as a working condition benefit/fringe, they would be responsible for accurately reporting the expenditure so that it did not appear in your wages. You would not have to file any special forms or schedules.
As long as the employer-provided assistance met one (or both) of the conditions discussed above, you don't have to include them as income.
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