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mhays09
New Member

Does a tuition waiver count as employer-provided assistance?

I am a State employee, and therefore the State signed off on a tuition waiver for my state law school.  The tuition was directly deducted, so I did not receive a form for this amount.
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MichaelDC
New Member

Does a tuition waiver count as employer-provided assistance?

Tuition waver is usually tax free and does need to be entered anywhere even if was reported to you on a form 1098-T.

The rest of this discussion doesn't directly pertain to your situation but is given to guide you in your understanding of the nature of general employer provided assistance.

By law your employer can only give you $5250 maximum, tax free. If your tuition was less than that, and you employer reimbursed it all; it’s safe to assume it does not need to be reported. You do not even need to enter your 1098-T if you have one. You have nothing to claim.

 If you got more than $5250, the amount above $5250 is usually already included in box 1 of  your w-2, as income.  Since you have essentially paid tax on that part, it  is considered your after tax money and that amount can be used  to claim the tuition credit.

If you have no out of pocket costs, you cannot claim the education credits.  If, for some reason, you left your job and were required to return pay to your employer, then you could claim the credit at that point.  Anything that you're not on the hook for (i.e. scholarships, grants, employer reimbursement) cannot be used towards qualifying funds for the education credits.

The amount that you can use for education credits is the total amount of tuition and fees paid (box 2 on the 1098) minus the amount of grants or scholarships (box 5 on the 1098) minus any amounts directly paid for by the employer, or reimbursed by the employer.

See IRS Topic 513 - Educational Expenses for further discussion: http://www.irs.gov/taxtopics/tc513.html

In TurboTax, you should report the amount spent/billed for tuition and fees on the 1098-T, regardless of who paid it.  The employer reimbursement amount should then be entered on the Scholarships/Grants screen on the Employer assistance line.  



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