My son is planning to pursue evening MBA & employed (not a dependent on my tax return). If I pay his tuition directly to the University will it be considered as a gift?

Forum|Forum|5 years ago
April 25, 2021
2 replies
0 views

He doesn't have enough money for tuition and hence I am planning to pay for his tuition but directly to the University and not to his bank account.

ToddL99

No, paying his tuition directly to the university is not considered as a "gift" for tax purposes.

Payments made directly to a qualifying domestic or foreign learning institution for the education of an individual qualify for the educational exclusion under Section 170(b)(1)(A)(ii) of the IRC.

You can pay your child's or grandchild's college tuition in the amount of $20,000 and also give him or her an additional $15,000 in the same year without incurring any federal gift tax. A few rules apply:

The payment must be made directly to the institution, not to the individual receiving the education.
The payment must be for tuition only. Other expenses, such as supplies and room and board, don't count.
The school must offer a regular curriculum and faculty and have a regular body of students.

See What Gifts Are Not Subject to the Gift Tax?

girigiriAuthor

If he gets a part of the tuition or the whole tuition by the employer, then will my payment made directly to the university be considered as a gift?

rjs

Employee

Are you the father or the son? You posted this question saying that you will pay your son's tuition, and then another question saying that your father will pay your tuition. Now you have discussions of the same situation going on in two separate threads. You are causing confusion and extra work for the people who are trying to help you.