I received a 1098-T for tuition I paid in 2017. My employer reimbursed $5,250 of that with the actual check received in 2018. Can I apply that to the 2017 tax year?

[taxquestions112]

My employer is reimbursing me $5,250 the first week of 2018 for tuition expenses incurred in 2017. Can I apply that benefit for the 2017 tax year since that was when tuition was paid? I am eligible for another $5,250 by my employer for tuition incurred in 2018 so do not want to take both in the same year.

[Critter · Accepted solution]

That is a tax free employer benefit ... you will not report it as income on either tax year.  It will however reduce the amount of expenses you paid out of pocket which will reduce your education credit. 

[taxquestions112]

My employer has to report any amount received over $5,250 in a single tax as income though. So can they apply the $5,250 paid in 2018 but for 2017 tuition as part the 2017 tax year? Or will I have to receive the entire $10,500 in the 2018 tax year, of which $5,250 will be taxable?

[Critter]

Ok ... talk to the employer but since they are limited to $5250 per tax year tax free it sounds like they are putting it on the last paycheck of 2017 which you may get in January ... or that will count for the 2018 reimbursement and they will do the same next Jan for 2019.   But if they do reimburse you for more than the tax free amount they are required to add it into your wages total on the W-2 so you will NOT enter it again ... but confirm this with the employer.

[denisehardie2]

Therefore if the additional amount over $5250 is included in W-2, do I then deduct the balance as education expense on Sch A?