Tuition reimbursement received after December 31.

[asteinhauser]

I paid $9,500 in tuition per my 1098-T for 2016.  Some of this is for a course that was done in January to March 2017, but it is still on my 2016 form.  My employer provides tuition reimbursement, but I will not receive that reimbursement until late April 2017.  The reimbursement matches almost all the tuition I paid.  However, because I haven't received it yet and have no way to report it, it appears like my reimbursement did not match the total tuition I paid and I am getting a tax break.  I'm worried I do not qualify for this tax break and will be penalized next year.  Is it better to A) just not report the tuition expenses and reimbursements so far or B) include the upcoming reimbursement I should receive so it is equal to the paid tuition I am reporting.

[MichaelMc]

In cases like yours, where the amount of the employer reimbursement is known or determinable, the best course of action is to treat the reimbursement as if you had received it in 2016, and reduce your eligibility for any of the federal educational tax credits or deductions.

Your instincts are good, in that you questioned the tax result obtained without considering the upcoming reimbursement. To file a tax return, under the pains and penalties of perjury, which includes a claim for a tax benefit that you know is the result of a timing error, and to which you are not truly entitled, is not a course of action that I would ever recommend. 

For more information, please see IRS Pub. 970 Tax Benefits for Education.