Your employer's payment for your tuition can be tax free, provided that all of the following conditions are met.
- All of the courses maintain or improve skills need in your current job. (Each course is evaluated separately. It is not sufficient that the degree is job-related.)
- The education is not needed to meet the minimum requirements for your current job.
- The education does not qualify you for a new trade, business, or profession.
If all these conditions are met, the tuition payment is considered a "working condition fringe benefit" and is tax free. It should not appear on your W-2 at all. It's not a bonus, and should not be called a bonus. A bonus would be taxable income.
