I graduated in Dec 2016. My employer did not pay nor did it required the MBA. It was my decision to improve my skills. It took 2 years to finish the program (afternoon classes). I am still working in the marketing department in the same company, so it did not qualify me for a new trade or business, it is not the minimal educational requirements of my trade or business.
You can deduct education expenses that are "ordinary and necessary" expenses that maintain or improve your skills in your CURRENT business. A recent case (Singleton-Clarke v. Commissioner) determined that the costs of seeking an MBA by a Registered Nurse met those criteria. It distinguished from two other cases where the costs were not deductible.
· One was a case where the taxpayer had not established a trade or business. After receiving an undergraduate degree, the taxpayer worked in the summer, then enrolled in an MBA program.
· In another, a West Point graduate who served in the US Army for four years began an MBA degree when he separated. As the taxpayer never worked in business, the Tax Court felt the MBA was to prepare him for a new trade or business, making it non-deductible.
A potential quick summary is that if you feel you meet the criteria of maintaining or improving your skills in your present business, you may want to deduct the costs. However, you should also consider that the IRS may challenge them if your return is audited.
If deductible and if you are an employee, they would be deductible as an employee business expense which is an itemized deduction. Consequently, it must be to your advantage to itemize to claim them. Even then, the deduction may be limited. Miscellaneous itemized deductions are only available if you qualify to itemize and only to the extent that they exceed 2% of your Adjusted Gross Income. Turbotax explains the 2% rule at this site.
They are found under the deductions and credits tab for employment expenses.
An interesting discussion of this issue that might help you is here.