I received 10k tuition assistance from my employer towards the tuition expenses of my dependent full-time undergraduate child. It was not reported on my W2. The employee assistance form says that the employee is responsible for paying taxes on the assistance amount. I guess $5250 of that tuition assistance is tax-free. Where do I report the remaining $4750 in Turbotax?
Thanks
The IRS may can allow up to $5,250 of employer-provided educational assistance to be tax-free annually. The remaining $4,750 is taxable income since it exceeds the exclusion limit and must be reported on your tax return.
What you describe is highly unusual. Your employer should have included the $4750 in box 1 of your W-2 and withheld FICA and income tax.
You said "I guess $5250 of that tuition assistance is tax-free." That may not be true. The fact that your employer is doing it wrong indicates that he may not have set up a qualified educational assistance plan. In which case, the $5250 is not eligible for exclusion The entire $10K may be taxable to you. Try to get clarification from your employer. Reference: https://www.law.cornell.edu/uscode/text/26/127
Either way, enter as described by @SabrinaD2 .
Thank You! I clarified with the benefits office. It turned out that all of the 10K assistance for the undergrad course is nontaxable if the employee's total compensation is under 120K pa.
Thank you for your response. It turned out that as per the assistance plan set up by my employer, all of the 10K is nontaxable for an undergraduate degree if the employee's total compensation is under 120K pa. Thanks again.