Discussion:S-Corp Fringe - Education for SH

    If, but for this paragraph, this section would exclude from gross 
    income more than $5,250 of educational assistance furnished to an 
    individual during a calendar year, this section shall apply only to 
    the first $5,250 of such assistance so furnished. 

(b) EDUCATIONAL ASSISTANCE PROGRAM

    (1) IN GENERAL 
 
    For purposes of this section an educational assistance program is a 
    separate written plan of an employer for the exclusive benefit of his 
    employees to provide such employees with educational assistance. The 
    program must meet the requirements of paragraphs (2) through (6) of 
    this subsection. 
 
 
    (2) ELIGIBILITY 
 
    The program shall benefit employees who qualify under a 
    classification set up by the employer and found by the Secretary not 
    to be discriminatory in favor of employees who are highly compensated 
    employees (within the meaning of section 414(q)) or their dependents. 
    For purposes of this paragraph, there shall be excluded from 
    consideration employees not included in the program who are included 
    in a unit of employees covered by an agreement which the Secretary of 
    Labor finds to be a collective bargaining agreement between employee 
    representatives and one or more employers, if there is evidence that 
    educational assistance benefits were the subject of good faith 
    bargaining between such employee representatives and such employer or 
    employers. 
 
 
    (3) PRINCIPAL SHAREHOLDERS OR OWNERS 
 
    Not more than 5 percent of the amounts paid or incurred by the 
    employer for educational assistance during the year may be provided 
    for the class of individuals who are shareholders or owners (or their 
    spouses or dependents), each of whom (on any day of the year) owns 
    more than 5 percent of the stock or of the capital or profits 
    interest in the employer. 
 

Good Luck!