Many employers offer up to $5,250 per year in tuition reimbursement for college courses. Under section 127 of the tax code, the IRS allows your employer to deduct the expense, and the benefit is not taxable to you as an employee.
Many employers use tuition reimbursement plans to help employees complete a bachelors degree or obtain a masters degree, but if you own a small business you might consider setting up one of these plans to help deduct a portion of your own child's tuition costs, if you employ your child legitimately in your business.
Such employer-provided tuition reimbursement plans offering up to $5,250 per year are alive and well thanks to the Fiscal Cliff deal a few years ago. These plans are used as an incentive for continuing education and employee retention at large companies, but entrepreneurs can use them to help pay for college tuition for their own children too, so long as they meet all of the rules.
The section 127 provision of the tax code that permitted these plans was set to expire in 2012, but through the Fiscal Cliff Deal they are now permanently available.