My employer reimbursed me for my 2023 Fall semester in 2024. Can I claim that towards the $5250 allowance from 2023? The expense were incurred in 2023 per 1098T.

[KrisD15]

Yes, if your employer refunded to you 5,250 (or less) for expenses that were paid in 2023, you can allocate that reimbursement to that 2023 expenses (as a refund). 

The 5,250 should not have been reported as wages, so it should already be tax-free. 

The expenses on the 2023 Form 1098-T (which is allocated to this employer reimbursement) should not have been used for an education credit on your 2023 tax year return or you may need to recapture that credit. 

Pub 970 

[SChen_0524]

Hi, 

I am in a similar situation, and I am unsure how to accurately report it. 

I took graduate classes in 2024 (spring, summer, and fall) totaling 20,000 as shown on the 1098-T.  $5,250 was reimbursed by my employer for the 2024 calendar year but the fall classes (ending in December 2024) was reimbursed by my employer for in the 2025 calendar year. When applying for the Lifelong education credits, would subtract the total amount reimbursed by my employer for both 2024 and 2025? or should I subtract the amount paid for fall classes and apply it to next year's taxes along with the 2025 reimbursement? 

[Hal_Al]

Q. When applying for the Lifelong education credits, would subtract the total amount reimbursed by my employer for both 2024 and 2025? 

A. Yes. Although mismatched years are  a problem for some other education tax benefits, you are allowed to do it that way for employer reimbursement.  Note: any additional employer reimbursement you get in 2025 will be taxable. That 2025 payment, although for 2024 tuition, counts as you 2025 tax free benefit. 

Q. Or should I subtract the amount paid for fall classes and apply it to next year's taxes along with the 2025 reimbursement? 

A. No.  Your not allowed to claim 2024 tuition on your 2025 tax return.  Furthermore, taxwise, your reimbursement must be matched to the tuition your employer tagged it for. 

[patel-harsh369]

Thanks for your response @KrisD15.
So I paid $2650 in tuition in 2023. However, my employer reimbursed that to me in Jan 2024. I haven't claimed any Credits on those tuition payments in 2023. 

In 2024, I paid $5250 towards tuition and my employer reimbursed me $5250 in 2024 itself. But due to the $2650 that was delay-reimbursed earlier in the year, it is shown as taxable income on my W2 for 2024.

In other words, if my employer had reimbursed the $2650 in 2023 then I won't have had to pay taxes on it in 2023, and would have been no taxes on tuition reimbursements in 2024 as well.

How would I reclaim the taxes paid on $2650 that is mentioned as income on my W2 for 2024? (assuming there is way to do so)

[SChen_0524]

Hi, 

Thank you for your prompt response!

Just to confirm I am understanding correctly, I would include the tuition reimbursement I received from my employer for the 2024 and 2025 year as it is for classes in 2024? For example, I received $5,250 for 2024 and $4,000 for 2025, I can report $10,750 ($20,000 - $9,250) for the Lifelong learning credits? 

Additionally, the $1,250 remaining for 2025 will be used in next year's taxes/lifelong learning credits since I will continue taking graduate classes? 

Thank you

[Hal_Al]

Q. Just to confirm I am understanding correctly, I would include the tuition reimbursement I received from my employer for the 2024 and 2025 year as it is for classes in 2024? For example, I received $5,250 for 2024 and $4,000 for 2025, I can report $10,750 ($20,000 - $9,250) for the Lifetime learning credit (LLC)? 

A. Yes. 

Q. Additionally, the $1,250 remaining for 2025 will be used in next year's taxes/LLC since I will continue taking graduate classes?

A. Yes.