Assuming the 1098-T was for an amount billed, but not paid; you do nothing. Do not even enter the 1098-T. The 1098-T is only any
informational document. The numbers on it are not required to be entered onto
your tax return. This further assume, you did not attend classes in 2017.
Assuming you paid tuition in 2017;
You have a choice (actually a
tax loop hole). You can claim nothing on your 2017 tax return, since it will be
reimbursed in 2018. Or, you can claim a tuition credit, because you are
out-of-pocket.
It may get a little
complicated reporting the 2018 reimbursement correctly. It's best explained by
example. Lets say you paid $6000 in tuition, in 2017, and use $4000 of that to
claim the tuition credit ($4000 is all you need to get the maximum amount of
credit on the American Opportunity Credit).
In 2018 you employer
reimburses you $6000. On your 2018 W-2 (received in Jan 2019), he shows $5250
(the maximum allowed) of tax free educational reimbursement and $750 of taxable
reimbursement. $750 will have already been included in box 1 of your W-2 as taxable income. You
now have to report $3250 (4000-750) as additional taxable income on your 2018
return. $3250 goes on line 21 of form
1040 as "Taxable Reimbursement". TurboTax can not automatically pull
that from your w-2. You have to enter it manually. In TurboTax enter at::
Federal Taxes Tab
Wages and income
Scroll down to:
--less common income
---Misc Income, 1099-A,
1099-C..... (Press start)
----On the next screen,
select Other reportable income
-----Two screens in, type
Tuition reimbursement and $3250
Alternatively (using the
numbers in the example), you can use only $750 to claim the tuition credit in
2017. Then, you will have to do nothing with your 2018 return.
