By law your employer can only give you $5250 ($4750 was in the past) maximum, tax free. They are allowed to give you more than $5250, but the additional amount is treated as taxable income to you.
If you get more than $5250, the amount above $5250 is usually already included in box 1 of your w-2 and you do not need to enter anything additional on your tax return. Since you have essentially paid tax on that part, it is considered your after tax money and that amount can be used to claim the tuition credit.
Q. Given I've already received $4080 this year, does that mean they can only reimburse me $1170 for this last part of my reimbursement, or should they be paying me the full $8000 that I submitted for?
A. That's up to you and your employer. If the third payment is more than $1170, the excess will be taxable income to you, for 2024. Another option is for you to not claim the reimbursement until 2025 and have it count against tax year 2025. You could also submit for $1170 reimbursement in 2024 and the rest in 2025, if you employer allows that.
Reference: https://www.irs.gov/newsroom/irs-reminder-employer-educational-assistance-programs-can-still-be-used....
