c$.$ If an employer provides a scholarship to an employee who is on leave of$$ absence$,$ is that scholarship$$ taxable?

A$.$

Scholarship money provided by an employer to an employee is never taxable to an$$ employee, regardless of whether the employee is on leave of absence or still working. The scholarship money is never considered compensation.

B$.$

If an employer provides a scholarship for an employee to obtain a higher$$ degree, that scholarship income is not taxable to the employee providing the higher degree will assist the employee in doing a better job for the employer.

C$.$

Any scholarship money an employer provides to an employee will be taxable to the$$ employee, providing that employee is taking a leave of absence to obtain a higher degree. If the employee is continuing to work for the employer while obtaining the$$ degree, the scholarship money will be nontaxable to the employee.

D$.$

It is likely that such a scholarship will be viewed as compensation for future$$ services, and$$ will, therefore, be taxable. The employee may be allowed to deduct the education expenses or claim a credit for them.