We receive a tuition reimbursement from my Union (I work and am in grad school). I dont receive that check until after I show them an official school transcript, so it's always a few months after the semester ends by the time the school AND union get all of the paperwork settled and there's a check in my hands. Do I apply a reimbursement check received in early 2017 to my 2016 taxes, since it's for the fall 2016 semester? Or do I apply it to next year's taxes?
You have a choice (actually a tax loop hole). You can claim nothing on your 2016 tax return, since it will be reimbursed in 2017. Or, you can claim a tuition credit.
It may get a little
complicated reporting the 2017 reimbursement correctly. It's best explained by
example. Lets say you paid $6000 in tuition, in 2016, and use $4000 of that to
claim the tuition credit ($4000 is all you need to get the maximum amount of
credit on the American Opportunity Credit).
In 2017 you employer reimburses you $6000. On your 2017 W-2 (received in Jan
2018), he shows $5250 (the maximum allowed) of tax free educational
reimbursement and $750 of taxable reimbursement. $750 will have already been
included in box
1 of your W-2 as taxable income. You now have to report $3250
(4000-750) as additional taxable income on your 2017 return. $3250 goes on line
21 of form 1040 as "Taxable Reimbursement". TurboTax can
not automatically pull that from your w-2. You have to enter it manually. In
TurboTax enter at::
Federal Taxes Tab
Wages and income
Scroll down to:
--less common income
---Misc Income, 1099-A, 1099-C..... (Press start)
----On the next screen, select Other reportable income
-----Two screens in, type Tuition reimbursement and $3250
Alternatively (using the numbers in the example), you can use only $750 to claim the tuition credit in 2016. Then, you will have to do nothing with your 2017 return.
You have a choice (actually a tax loop hole). You can claim nothing on your 2016 tax return, since it will be reimbursed in 2017. Or, you can claim a tuition credit.
It may get a little
complicated reporting the 2017 reimbursement correctly. It's best explained by
example. Lets say you paid $6000 in tuition, in 2016, and use $4000 of that to
claim the tuition credit ($4000 is all you need to get the maximum amount of
credit on the American Opportunity Credit).
In 2017 you employer reimburses you $6000. On your 2017 W-2 (received in Jan
2018), he shows $5250 (the maximum allowed) of tax free educational
reimbursement and $750 of taxable reimbursement. $750 will have already been
included in box
1 of your W-2 as taxable income. You now have to report $3250
(4000-750) as additional taxable income on your 2017 return. $3250 goes on line
21 of form 1040 as "Taxable Reimbursement". TurboTax can
not automatically pull that from your w-2. You have to enter it manually. In
TurboTax enter at::
Federal Taxes Tab
Wages and income
Scroll down to:
--less common income
---Misc Income, 1099-A, 1099-C..... (Press start)
----On the next screen, select Other reportable income
-----Two screens in, type Tuition reimbursement and $3250
Alternatively (using the numbers in the example), you can use only $750 to claim the tuition credit in 2016. Then, you will have to do nothing with your 2017 return.
Do you mean you can use $750 to claim the tuition credit in 2017? not 2015?