If we paid upfront for tuition for the last term of 2019, however we did not receive the employer tuition reimbursement until 2020 and the employer is considering the tuition draw against the 2020 $5,250 limit, do we file the 2019 tuition cost as our own expense?
No, unless your education expenses exceed the educational assistance benefit your employer is providing. I believe you are asking if you could take education expenses that were yet unreimbursed in 2019 that were reimbursed in 2020 as your own education expenses. And, it would also appear that the employer reimbursement limit of $5,250 was already received in 2019.
The IRS Publication 970 on page 65 states that you cannot use any of the tax-free education expenses paid for by your employer as the basis for any other deduction or credit, including the American Opportunity Credit and Lifetime Learning Credit.
You have a choice (actually a tax loop hole). You can claim nothing on your 2019 tax return, since it will be reimbursed in 2020. Or, you can claim a tuition credit, because you are out-of-pocket. But, then you will have to report the reimbursement as taxable income on you 2020. return
It may get a little complicated reporting the 2020 reimbursement next year, since your employer ill treat it as tax free (up t $5250). See below for how to do it. Since the American Opportunity Credit is so generous (100% on the first $2000, 25% on the next $2000), you will come out ahead by claiming it (up to $4000).
. In TurboTax enter at::
Federal Taxes Tab
Wages and income
Scroll down to:
--less common income
---Misc Income, 1099-A, 1099-C..... (Press start)
----On the next screen, select Other reportable income
-----Two screens in, type Prior year Tuition reimbursement and the amount (not more than $4000).