Employer paid Tuition but the parents had to pay the Taxes on the Tuition...No amount in Box 2. of the 1098-T...Can Taxes be part of the Work Educational Expenses?

[KrisD]

-No you can't report the tax paid on the income as an education expense, but since the employer reported the amount in Box 1 of the W-2 (so it is taxed) it would not be considered as tax-free assistance. In other words, if the employer included $5,000 as education pay, but it was reported as part of wages, that $5,000 in expenses may be used towards an education credit.

It would be the same as if you earned the money, (paid tax on that earning) and then paid the expenses. The expenses are yours to claim unless the employer reported it as "Tax-free education reimbursement"

Credits are based on what was paid to the school, and that is reported in Box 1 of the 1098-T. 

CLICK HERE for IRS Pub 970 Tax Benefits for Education