Hi! I just received a job offer that includes a sign on bonus to cover the cost of a certification that I’m getting (study program and exam fees). My offer letter states that the appropriate withholding and tax will apply. I’m not sure what that means - does anyone know if this amount should be tax free because of its purpose? It’s not a bonus or anything. I want to make sure I have a general idea before I ask HR about it.

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It is considered compensation so it is taxed

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Yup D1 is correct ^. IRS determines this is taxable income

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It’s a sign on bonus so taxes are probably withheld at the supplemental rate. Doesn’t matter what you are using it for, it’s a cash payment.

Adding on to this, even if it wasn’t a sign on bonus (I.e. you were already working there and they reimbursed you for the cost of the certification) this would still be taxed. My company paid for my CPA review materials, without me ever having to front the cost and I was still taxed on the cost of the materials as if it were income.

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Thanks everyone!

Ask for it in cash under the table and the. You won’t have to pay taxes on it

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