Can my family-owned corporation (C corporation) sponsor my education?

Can my family-owned corporation (C corporation) sponsor my education? The corporation has only two employees — my husband and me.

You may be aware that usually a corporation can set up a qualified tuition plan to provide employees with company-paid college or graduate level courses that's excludable up to $5,250 per year. However, in your situation, such a plan would not work. The reason: No more than 5% of the benefits of such a plan can go to owners on a tax-free basis and, since you and your spouse (the only employees) are also the owners, all of the benefits would go to you. But if your company pays for certain job-related courses (e.g., a computer course on the latest system used in your business), you are not taxed on this benefit — it's treated as a fully excludable working condition fringe benefit.