It depends on how much they paid.
- If your employer paid $5250 or less for educational assistance benefits under an educational assistance program, you can exclude up to $5,250 of those benefits each year. This means your employer should not include the benefits with your wages, tips, and other compensation shown in box 1 of your Form W-2. And you would not enter the 1098-T, because you aren't claiming any tax benefit.
- But if your employer pays more than $5,250 for educational benefits for you during the year, you must generally pay tax on the amount over $5,250. Your employer should include in your wages (Form W-2, box 1) the amount that you must include in income. And you would enter the 1098-T, and because you'd be able to claim a tax benefit for the assistance that you paid tax on.
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