26 CFR §1.127-1

1. (a)Exclusion from gross income. The gross income of an employee does not include—
   1. (1)Amounts paid to, or on behalf of the employee under a qualified educational assistance program described in § 1.127-2, or
   2. (2)The value of education provided to the employee under such a program.
2. (b)Disallowance of excluded amounts as credit or deduction. Any amount excluded from the gross income of an employee under paragraph (a) of this section shall not be allowed as a credit or deduction to such employee under any other provision of this part.
3. (c)Amounts received under a nonqualified program. Any amount received under an educational assistance program that is not a “qualified program” described in § 1.127-2 will not be excluded from gross income under paragraph (a) of this section. All or part of the amounts received under such a nonqualified program may, however, be excluded under section 117 or deducted under section 162 or section 212 (as the case may be), if the requirements of such section are satisfied.
4. (d)Definitions. For rules relating to the meaning of the terms “employee” and “employer”, see paragraph (h) of § 1.127-2.
5. (e)Effective date. This section is effective for taxable years of the employee beginning after December 31, 1978, and before January 1, 1984.