Employer Tuition Reimbursement

[byoung999]

Hello, I'm not 100% certain on how to file for my tuition reimbursement from my employer (or if necessary at all).

I'm a part time student totaling $2,051.40 of tuition last year (box 1 of form 1098-T). Under the education section of Turbo Tax, I qualify for both the American Opportunity Credit and the Lifetime Learning Credit. But If I go to scholarships and grants, there's a box called Employer-Provided Assistance.. Entering the amount of 2051.40 cancels out the amount of the credits. What I'm unsure about is whether I have to report the amount or not since it's under the $5250 taxable amount for education assistance.

Can anyone enlighten me on what I should do?

Thanks!

EDIT: I'm not 100% certain that it's been taxed already on my income. There are many different small bonuses from last year we received that make it unclear what is included in our wages for our W-2s

[KrisD15 · Accepted solution]

YES

you must report employer assistance. 

If it was taxed, it would be included in your wages, Box 1 of your W-2, but that would be uncommon. 

If your employer provided education assistance (they can give up to 5,250 tax-free) that amount needs to be reported and subtracted from any expenses that would OTHERWISE be eligible to be applied towards an education credit. 

According to the IRS:

"You can’t 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."

IRS PUB 970

[Hal_Al]

You say you're 100% certain that the reimbursement has been taxed.  If that's true, you do NOT have to report the tuition reimbursement and can claim the entire $2051 for the tuition credit.

But you probably shouldn't be 100% sure. As KrisD1 said, the opposite is usually true.  Any amount under $5250 is usually tax free.  As such, you cannot claim (for the credit) any tuition paid by tax free employer reimbursement.