Deducting Educational payments back to the employer

Hello, My employer paid for my tuition for graduate school for years 2015 and 2016. There was an agreement to stay at the company for 2 years after tuition has been paid. If I left early, I would have to pay back the tuition paid by the employer to the School within last 2 years. I quit early and now I am paying back the tuition cost paid in last two years as monthly payments back to the employer. Is there a way to claim these payments as educational expenses? How else can I deduct them on the 2017 tax return?


Anita01
New Member

Education

The only way to claim these expenses would be to amend the prior year returns to add the costs as educational expenses.  

They are not deductible in 2017 for the simple reason that you did not pay tax on these amounts when you received them.  They are particularly not deductible as educational expenses because you were not currently enrolled and no money was paid to the educational institution.

If you did pay tax because the employer included them in Box 1 of your W-2s from those periods, they would be deductible as a claim of right in your personal itemized expenses.  In that unlikely case, please post back and I'll add information on how to do that.

Education

I did not have to pay tax on it when my employer was disbursing the tuition to the school since the degree fell under the field I was working in and it was needed to move to next level at work. Can I still amend 2015 and 2016 returns and claim these payments as educational expenses?
Anita01
New Member

Education

Yes, you can.  You won't receive the American Opportunity credit since it was grad school, but the are other credits you may qualify for.