I received 5k from work for tuition reimbursement in Jan 2017 for Fall 2016 semester. I'll get 5K in May2017 for Spring. How do I report this?

[cristinapeters]

I'm a full time student in Massachusetts and I'm making $55,000 before taxes. The refunds I'm receiving are not taxed. I'm confused on what to do since my first refund was for 2016 semester..although I received the money in Jan 2017? 

[MichaelMc · Accepted solution]

Amounts received by an employee under a written educational assistance plan are excluded from taxable income, up to $5,250 per year. It would appear that your employer has the intention to treat the payment you just received as a 2016 benefit and the payment in May as your 2017 benefit, both within the maximum for the respective year. 

The amount received should not be included in Box 1 of Form W-2. Since the benefit is not taxed, you have no reporting obligation on your tax return.

For more information, please see IRS Pub. 970 Tax Benefits for Education.

[ebwhite8617]

What happens in this scenario if 529 funds were used up front to pay the tuition?