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If I Hire My Kids, Can I Give Them Tax-Free Education Benefits?

Written by Coach Janelle CPA on April 28, 2023

If your children work in your business, consider giving them education fringe benefits. Doing this right creates

tax deductions for the business, and
tax-free fringe education benefits for the child.

You can accomplish this without a Section 127 plan when your child needs the education to do the job for your business or to comply with a law or regulation.

In general, you can’t treat undergraduate degree programs as work-related education. If you pay for such programs outside of a Section 127 plan, you must treat the payments as taxable income to the child-employee.

But certain individual courses within a program may be evaluated separately, and certain courses, such as accounting courses for an employee-child with an accounting job, may qualify for tax-free working condition fringe benefit payments.

On the other hand, MBA programs can qualify as work-related education if they maintain or improve the employee’s skills for his or her current profession or business.

In addition to the possibilities listed above, if your child is age 21 or older, the Section 127 plan can offer up to $5,250 in tax-free education benefits.

Are you tired of feeling overwhelmed and uncertain when it comes to tax season? Do you want to take control of your finances and maximize your savings? Look no further than Coach Janelle CPA's tax planning services. Our team of experts will work with you to develop a personalized tax plan that fits your unique needs and goals.

With our help, you can say goodbye to the stress and confusion of tax season and hello to a brighter financial future. Whether you're a business owner, a freelancer, or an individual looking to optimize your savings, we have the expertise and experience to guide you every step of the way.

So why wait? Take the first step towards financial freedom and contact Coach Janelle CPA today. With our tax planning services, you can rest easy knowing that you're in good hands. Let us help you reach your financial goals and achieve the peace of mind you deserve.

About Coach Janelle CPA

My passion is to help 6 & 7- figure+ earners see their financial possibilities through financial literacy and strategy. 

I want to help you save on taxes so you can keep more of your money to live the life you dream of and have worked for NOW, and build wealth and equity for the next generation.

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