Employer Tuition Assistance and Lifetime Learning Credit

[rlg8]

My employer paid me directly $9269 for tuition ($9174) and books ($95) in 2024. $5250 was tax free and the remainder ($4019) was taxable. My school includes the $9174 on my 1098T.

Am I able to qualify for the lifetime learning credit? I'm confused what amount to enter for employer provided assistance received (Don't include amounts already listed on a W2 or other tax document.

[KrisD15]

When you say your 1098-T includes the 9,174, in which box? It should be in Box 1 and nothing in box 5.

If Box 1 of the 1098-T reports 9,174 and Box 5 is blank, the question is if the tuition reimbursement was listed on your W-2. It usually is not.

If the 5,250 was given directly to you (as well as the remaining 9,174) and 3,924 was added to your income in Box 1 of your W-2, (as I assume was the case) when you enter the 1098-T, also report 5,250 as employer assistance in that section. 

The program will read that there was 9,174 education expenses, your employer paid 5,250, therefore your credit will be based on 3,924 of expenses. 

[rlg8]

Correct the $9174 is in Box 1 of the 1098T nothing in Box 5. I calculated the taxable portion ($3924) is included in my wages in box 1 of my W2. So the taxable portion is applicable for the credit.

[KrisD15]

Yes, the taxable portion is what the credit would be based on

HOWEVER

I think you could actually allocate just 5,155 as employee assistance against the 1098-T since  part of the 5,250 went for books and if the books are not listed on the 1098-T.

So if the tuition was 9174, which is listed on the 1098-T and the employer gave you 5,250, which 95 went to books (not on the 1098-T) that would leave 5,155 employer assistance you would need to report in the TurboTax program, giving you 4,019 that was added to your taxable income.

If I am following correctly, that would give you 4,019 towards the credit. 

Now I see you had those figures in your first post. Yes, I agree.

[Hal_Al]

I agree $4019 is the amount of eligible expenses for the Lifetime Learning credit.  If you're having trouble getting there, there's a workaround: delete the 1098-T and start over, entering a 1098-T with $4019 in box 1(the amount you know to be qualified). Don't bother entering any other numbers.  The 1098-T you enter is not sent to the IRS.