Can I claim tuition expenses paid in 2016 without a 1098T?

[rebelyell87]

My employer pre-paid for my 2016 Master's degree tuition in full in 2015. As my employer pays for a certain portion of my tuition every year, I had to repay them a portion of my 2016 tuition. I made this payment in 2016. Because the tuition was paid by my employer in 2015, I did not receive a 2016 1098T. Can I claim the repayment I made to my employer in 2016? I have a receipt of payment to my employer dated in 2016.

[Hal_Al]

It's not clear what you are saying. "As my employer pays for a certain portion of my tuition every year, I had to repay them a portion of my 2016 tuition".
Employers are allowed to give employees up to $5250 tuition assistance, tax free, each year. Any amount over that is to be treated as taxable income. So, it matters whether you paid back taxed or tax free money

[rebelyell87]

My employer pays $3,000 per year in tuition assistance. My tuition bill for 2016 classes was $4,500. My employer paid the full tuition ($4,500) in 2015 as they are billed directly by the college. In 2016 I had to pay the difference ($1,500) to my employer. Can I claim that $1,500 on my 2016 taxes?

[wschupp]

I am not sure, but would guess you can. If you can't find the answer in FAQ's go to TurboTax support. Then place a phone call for the help you need. I had a problem with tuition expenses and the 1098-T form. You must enter the numbers exactly as they appear on the 1098-T. If block 2 has an incorrect value check the block below to proceed.

[Hal_Al]

It's complicated.

Was the $1500 included as taxable income on your 2015 W-2?  If no (and no is the most likely answer), you cannot claim the $1500, you repaid in 2016, as a deduction. This is because you are not repaying income that was previously taxed.

However, what you can claim is $1500 toward the tuition credit on your 2015 tax return. That may require you to file an amended 2015 return.

[rebelyell87]

So I cannot claim $1,500 I paid in 2016, for classes taken in 2016, as a 2016 expense?

[Hal_Al]

Technically, no. You did not pay tuition in 2016. You paid back a loan, from your employer. The loan money paid tuition in 2015.

[rebelyell87]

Thank you for the help. Not the answer I was hoping for unfortunately, but I appreciate it. I guess I don't understand how I could take credit for paying tuition costs because of how my employer handles the transaction with the college.

[Hal_Al]

The college received $4500 in 2015. For tax purposes, that's when the tuition was paid. Although it appeared it was all paid by employer assistance; in actuality, it wasn't. $3,000 was paid by a grant and $1500 by a "student" loan. Essentially the same as millions of other students. The tuition is deductible when the college is paid, not when the student pays off the loan.