Employer Reimbursement Question(over $5250)

[conn-chris-j]

I want to confirm that I am filing my taxes correctly. Here is my situation:

My employer reimburses my tuition up to $8000 a year, with $5250 of that being tax-free. The rest of that amount is considered taxable income and included in my W2. This is the exact written communication by my company:

"If you receive more than $5,250 in benefits under this Plan in a calendar year, the amounts you receive over $5,250 are taxable income to you.  Any amounts over $5,250 must be included on your W-2 for the year the benefit was disbursed"

For 2023 I paid $7730 total in tuition and was reimbursed the full amount. Since I received the additional funds as taxable income am I able to count the difference towards my education credits? Since I paid $2480 over the non taxable amount and was reimbursed via my W2, I should be able to claim that amount for the education credits, correct? It does not appear my tuition reimbursement was included in an special boxes on my W2 and appears to have been included with my overall wages.

I just wanted to make sure I am ok to claim this excess amount since it was added on my W2

[Hal_Al]

Yes, you understand it correctly.  You may use $2480 to calculate your tuition credit. 

[Hal_Al]

The TurboTax interview can handle this situation. Although the simpler workaround is just change the box 1 amount on the 1098-T to $2480 when you enter it. 

The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or possibly your student has taxable scholarship income. 

If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)

You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. 

Or if you find it easier, just change the numbers in boxes 1& 5 to what your records show. The 1098-T that you enter in TT is not sent to the IRS.