1098-T Employer paid university

[Lowmillert]

I received a 1098-T from my college that I am getting a bachelors degree by having my employer which is an elementary school who is my third-party payer for my tuition. I am in this apprenticeship program in Iowa called " Iowa TPRA program"(Teachers and Para educators Registered Apprenticeship) My employer does not put any income from this on our W-2 forms and they get an invoice from the university and pays them directly, no payment or money goes through the students. I was needing help on how to input the form 1098-T form into taxes. If my 1098-T form states in box 1 the amount is $7,950 and the Box 5 states I have $12,157.30. That's the only amounts listed in the boxes on my 1098-T form. 

[Hal_Al]

We need more information.

Does the $12,157.30 in box 5 include the amount your employer paid?

Why is there a difference between box 1 and box 5 if your employer is only paying your tuition?

Is the program a scholarship or employer reimbursement? 

The general rules are:

-Your employer is allowed to pay (or reimburse you) up to $5250, for tuition, tax free. Any tuition assistance over $5250 should be included in box 1 of your W-2 as taxable income. 

-Scholarships that pay for qualified educational expenses (QEE)(tuition, fees and course materials) is tax free (no amount limit).

-Employer tuition assistance is not usually classified as  scholarship, although colleges sometimes do mistakenly show it in box 5 of the 1098-T. There may be something about the TPRA program that may make it "scholarship". 

-The difference  (if box 5 is more) between box 1 and box 5 is usually taxable income to the student unless he has additional QEE not shown in box 1

[Lowmillert]

It is a program type of program. The employer pays the college directly for tuition expenses. The reason for the differences between the boxes is from federal aid scholarships I personally applied for even thought the employer is paying for tuition so I can pay for school supplies like the computer and webcam needed to do the online classes and for student teaching clothes and supplies. The extra that is added in box 5 is the grants and scholarships i received that was extra. This is not a employer reimbursement type of thing.

[Hal_Al]

deleted

[Lowmillert]

The amount in box 1 is from the employer paid to my student account to pay for my tuition, the Box 5 is the total amount of that was paid to me on behalf to use to pay for financial needs like when I have student teaching and using that for bills, student supplies (like professional clothes for teaching, computer and webcam expenses that was needed in order to do course work online. 

So, no I don't think that is included in that amount in box 5 of the 1098-T form,  that is solely the total amount of the grants and scholarships I was granted or selected for. This was for financial help to be able to pay for financial needs during student teaching and supplies. I am using the money from box 5 for student teaching expenses and bills when I don't get paid for the three months of student teaching and the school items needed to have for this program and student teaching. 

[Hal_Al]

As I now understand it, the "program" paid the $7950 in box. But the $2700 difference from the $5250 allowable amount (7950-5250 =2700) will not show up on your W-2 as income.  That is sometimes allowed. So, I assume your employer's  program meets the IRS rules for the exception (the education essentially must be job related).

I also assume none of the extra grants and scholarships in box 5 went for the box 1 tuition.  That means the amount in box 5  is taxable income to you, unless you can enter some additional QEE, such as books and a required computer.  Professional clothing and student teaching supplies do not qualify as QEE.  A computer does.  "Course materials" required for classes you are taking, as a student, are QEE. Course materials  for classes you are teaching, as a student-teacher, are not QEE. 

The way it usually works is: you enter the 1098-T, as received. TurboTax (TT) treats the the difference between box 5 and box 1 as taxable income, unless you enter additional expenses. Answer yes when asked if you had book expenses to get to the expense entry screens. 

But, in your situation, you'll have to use  a workaround, in TurboTax. When you enter the 1098-T, you enter it with  0 in box 1. The alternates are to enter $7950 as employer assistance or as additional scholarship, not shown on the 1098-T.

[Hal_Al]

I have revised my last reply. The whole box 5 amount is probably taxable. 

Even so, your situation is still unclear. You may need to go to a tax pro.

What's not clear is what is this program that pays your tuition and how is it related to employer and the usual employer educational assistance plans? How do you get  additional scholarships if your tuition is already covered by another program.  Scholarships for room and board and personal are usually taxable (unless you use some of the money for qualified expenses, like books and a computer).  What is your student/employee situation ( you mention "student teaching").