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WARN Notice and Repaying Tuition Assistance Virginia

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  • WARN Notice and Repaying Tuition Assistance Virginia

    Greetings,

    My previous employer gave me a WARN letter on March 31, 2012 with a termination date of May 31, 2012. Due to the small job market that I live in, I chose to take the first job offer I got outside the company as I did not get any job offers from internal postings at other locations. Two weeks ago I received a letter from my previous employer requesting that I pay back the tuition assistance I received in October 2011. The company's policy is TA must be repayed if the employee leaves voluntarily prior to 24 months after receiving TA.

    My questions are: (1) Is a WARN letter a termination letter? (2) Do I still have to pay back tuition assistance after receiving a WARN letter even if I didn't stay until the termination date on the letter? (3) If I am required to pay the TA back, can I declare this repayment on my 2012 tax return if I pay it by the end of the calendar year?

    Thank you for your time!
    Laid off in Hampton Roads, VA

  • #2
    You have several very unrelated things happening here.
    - The WARN act is a federal law. Rather then explain it, I have included a pointer
    http://www.dol.gov/compliance/laws/comp-warn.htm
    - Your tution assistence is legally unrelated to the WARN act. I have not read your paperwork, so there is some guess work here. The fact that tution is conditional means that this is basically a so-called condition wage payment or conditional loan payment. Or maybe they did not declare it as wages. Maybe a lot of things. I cannot assume that they know what the law. You would presumably know if they have already declared a wage payment on the tuition. More likely they have made a payment directly to the third party. They have not (yet) declared a wage payment. The paperwork likely says that if you fail the conditions that you will pay them back. Fair chance that they do not necessarily know (yet) what they will do if you fail to do so. Conditional wage payments are a very poorly defined area of the law. If they are smart, they had you sign some type of loan paperwork, in which if you meet the conditions they forgive the loan (causing taxable wages to occur at the point) and if you do not then they just have a normal vanilla loan document that they can take you court on. If they are not smart, they likely have just thrown something together. Maybe they are trying to have it both ways, and use one of the IRS approved qualified education types, Work Related education and Educational Assistence Program. The problem is that neither IRS code supports condtiional usage, especially not EAPs. There is a real possibility of a very murky situation here. Unfortunately, this might not help you if they get into trouble with the IRS later, because they are just going to claim this as a loan (their lawyer will know better even if they do not).
    - Regarding 1040 issues, we are back to has this already been declared as wages to you somehow? If not, then I do not see how the repayment would affect the 1040. Even if it was previously declared as wages, I am not a 1040 expert and will have to defer that to someone else.
    DAW
    Senior Member
    Last edited by DAW; 09-21-2012, 05:04 PM.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      There is nothing about receiving a WARN letter that gets you out of havung to repay tuition assistance. Many companies will waive repayment if termination is not for cause but that is just a matter of their own policies, not the law. The tax issues are a totally separate issue and have no bearing on whether or not they can ask for the money back. I'd recommend taking to a tax advisor if you are unsure how to handle the tax aspect. It is totally legal to ask for the money back. If you left them voluntarily before the termination took place, chances are very good that you do owe the money back.
      I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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