I received a form 1098T from my school with the amount that was paid to my school ($14.028) however a loan was used...can I still get a life learning credit

[Keesha765]

In addition the classes that I paid for, I was reimbursed the money by my job once they received my grade, how do I go about reporting the reimbursements received by my job since it’s not reported on my W2

[Keesha765]

*Correction the classes that the loan paid for I was reimbursed by my job the once I received my grade. For example, my school was paid $14,028 in total, I took 5 classes in 2019 which cost $10,020 this is the amount I was reimbursed by my job which I will pay the loan with. How do I claim this...sorry I know it’s confusing...I was going to go to a tax preparer but last year I paid $225 so I’m trying to avoid that.

[AnnetteB6 · Accepted solution]

If there is an amount left over that is not reimbursed by your job, but that was paid by the loan, then you may qualify for an education credit based on that left over amount.

You will enter your work reimbursements in the Scholarships/Grants section of the education part of your return.  

Start by going to the Education section of your return using these steps:  

• On the top row of the TurboTax online screen, click on Search (or for CD/downloaded TurboTax locate the search box in the upper right corner)
• This opens a box where you can type in “education” (be sure to enter exactly as shown here) and click the magnifying glass (or for CD/downloaded TurboTax, click Find)
• The search results will give you an option to “Jump to education”
• Click on the blue “Jump to education” link

Then, if you are not prompted to enter your 1098-T, go through the entire education expenses section (without entering any information yet) of your return until you reach the screen titled “Your Education Expenses Summary”, then follow these steps:

• Click Edit next to the student name.
• On the screen titled “Here’s your Education Summary”, click Edit beside Tuition.
• Enter the information from your Form 1098-T.

After you have completed the section for your Form 1098-T, you should be on the Education Summary page.  From here:

• Click Edit beside Scholarships/Grants (for all schools) 
• Answer Yes to expand the page
• Enter your reimbursements in the box labeled Employer-Provided Assistance

[Hal_Al]

Usually, you may not claim a tuition credit for expenses paid (or reimbursed ) by tax free money (e.g. scholarships, grants, VA benefits or employer reimbursement). Employers are allowed to reimburse employees up to $5250 tax free. Anything over that is taxable and included as taxable income on your W-2. So, any expenses over $5250, including books, may be used to claim a tuition credit.

The fact that you used loan money does not change that.  Tuition and other qualified expenses, paid by loans, counts as paid by you. 

So, $14,028 - 5250 = $8778 may be counted in claiming the Lifetime Learning Credit (LLC). 

[Hal_Al]

" How do I go about reporting the reimbursements received by my job since it’s not reported on my W2".

You need to verify that's what happened. As previously explained that's not how it usually happens. 

However, if your employer treats your  education as a business expense (job training), instead of tuition reimbursement, the entire amount can be tax free (not included on your W-2).  In that case, you may only count $14,028 - 10,020 = $4008 for the LLC.

[Keesha765]

So is $8778 the amount that I enter in box one or do I enter $14,028 and claim $8778 as a qualified expense?

[Keesha765]

Thank you 🙂