My employer dependent tuition benefit correctly added to my W2. Employer uses 3rd party to pay college. College records payment as scholarship. How should I enter 1098T?

[Taxpayer6]

Hi,

I work for a hospital that a few years ago split off as a separate company from a University. As part of the split from the University, tuition benefits were carried over to the new Hospital company. As the parent of a college child I get this "tuition" benefit from my Hospital employer. The amount paid by my employer to the college via a third party is correctly added to my income and shows on my W2. As stated, this was all part of the negotiations when the hospital split off from the university. The amount in box 5 on the 1098T from the college includes the amount my employer paid to them via a 3rd party. Yet this amount is already included as income on my W2. According box 5 exceeds box 2 and I do not get any education credit on my return. The college (and may other colleges attended by other employee children) is reporting the 3rd party payment as a scholarship/grant. I understand this is how they are interpreting the 1098T wording. But these amounts are already included as income on my W2. Had I paid the college myself rather than my employer using a 3rd party, then the college would not classify this money as a scholarship/grant.

Do you have any advise on what/how I should legally fill out the 1098T information in order to get the IRS education credit?

Thanks,

"Taxpayer"

[kerriP]

So you will complete 1098-T information just as it is shown on the form.  If you keep going in Turbo Tax after you enter the 1098-T information,  3 or so screens later, Turbo Tax will ask if any of the scholarship money on 1098-T was included in income.   You will say yes, and then a box drops down to fill in the amount.  You will possibly need to get to this screen by choosing edit button for the 1098-T.  I have attached a screen shot.  

By stating that the scholarships were already in your income, you should be able to claim the credit.

[Taxpayer6]

TurboTaxKerriP - thank you for the prompt reply. I had seen that question of "if any of the scholarship money on 1098-T was included in income" previously, but interpreted it as income on my son's W2 rather than mine (while preparing my own tax return).
Thank you once again.