I use Turbo tax desktop so I cannot ask this question through Live Advice.
In 2022 I finished my masters degree which my company pays for. I paid up front and get reimbursed for my tuition from my employer, but that generally lags the school semester by a month or so - my last semester of 2022 was reimbursed in 2023. One of my two fall semester classes in 2022 did not get reimbursed since it did not meet my employer minimum grade – but it did count as a pass grade. I believe I can use that class payment to qualify for the Lifetime Learning Credit (LLC). I am under the required AGI and I did have enough income taxes paid to have a tax reduction.
Since I did not get a 1098-T for 2023 (all payments were in 2021 and 2022), I tried to amended my 2022 form via Turbo Tax to qualify for the LLC since I did pay for the reimbursement denied class in 2022.
When I went to Turbo Tax to file the amended return, it said that I can’t claim an education tax break because of one of the following:
1) Somebody can claim me as a dependent (not the case).
2) Scholarships, grants and other tax free assistance exceeded the education expense (it did not I paid $4928 according to worksheet calculations).
3) There where no qualified educational expense (there was – I paid for one class that was not reimbursed).
The way I calculated the expense, I should have been able to reduce my total taxes owed by $986(20% of $4928) calculated by form 8863 and schedule 3. This should have been used to reduce my total 2022 taxes owed.
Detail calculation:
$43782 Qualified education expense in box 1 of 1098-T
– $ 5000 Grant in box 5 of 1098-T
– $33854 Employer reimbursement (combined 2022 and 2023)
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$ 4928
x .2 Line 12 of form 8863
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$ 986
What am I missing?
Thanks in advance.
