Qualified tuition reduction
(1) In general
(1)In general#
Gross income shall not include any qualified tuition reduction.
(2)Qualified tuition reduction#
For purposes of this subsection, the term “qualified tuition reduction” means the amount of any reduction in tuition provided to an employee of an organization described in section 170(b)(1)(A)(ii) for the education (below the graduate level) at such organization (or another organization described in section 170(b)(1)(A)(ii)) of—
(A) such employee, or
(B) any person treated as an employee (or whose use is treated as an employee use) under the rules of section 132(h).
(2)(A)#
such employee, or
(2)(B)#
any person treated as an employee (or whose use is treated as an employee use) under the rules of section 132(h).
(3)Reduction must not discriminate in favor of highly compensated, etc.#
Paragraph (1) shall apply with respect to any qualified tuition reduction provided with respect to any highly compensated employee only if such reduction is available on substantially the same terms to each member of a group of employees which is defined under a reasonable classification set up by the employer which does not discriminate in favor of highly compensated employees (within the meaning of section 414(q)). For purposes of this paragraph, the term “highly compensated employee” has the meaning given such term by section 414(q).
(4)Repealed. Pub. L. 101–140, title II, § 203(a)(1) , (2), Nov. 8, 1989 , 103 Stat. 830 ]#
(5)Special rules for teaching and research assistants#
In the case of the education of an individual who is a graduate student at an educational organization described in section 170(b)(1)(A)(ii) and who is engaged in teaching or research activities for such organization, paragraph (2) shall be applied as if it did not contain the phrase “(below the graduate level)”.