Q. Her brother's employer. Does that count as employer assistance if it's not her employer?
A. Yes, probably. It depends on the rules/conditions for the employer's plan. Most employer assistance plans allow family members to collect (although a sibling is a little unusual). Employer assistance (up to $5250) is tax free as long as it is used for qualified expenses (usually tuition). Unlike scholarships, employer assistance can not be used for the AOTC "loop hole". It could also be that the brother's employer has a qualified scholarship fund (a scholarship usually comes from a foundation related to the employer, rather than from the employer it's self).
Q. Do I have to pay the spring tuition before the end of 2022 because the checks were issued in 2022.
A. Yes. But, just turning the checks over to the school counts as paying it in 2022. It is not neccessary that the school post the payment to the student's account in 2022.
Q. I assumed the donors (especially the biggest one, her brother's employer) would be issuing some sort of 1099, so they could write the scholarships off on their taxes?
A. No. It's handled on the employee's (her brother) pay stub and W-2, if it's classified as employee assistance/tuition reimbursement. It's not uncommon for the school to show employee assistance in box 5 of the 1098-T, although that's technically incorrect. Foundations do not issue 1099's for scholarships. They're "non-profit" organizations.
