Hal_Al
Level 15

Education

The first $5250 of employer educational assistance is usually tax free. It would be "double dipping" to claim the tuition credit on the first $5250, since you already got a tax break.  If you got more than $5250, and paid tax on it (and you usually do - this should be reflected on your w-2) the extra is considered your money and can be used to claim the credit.

 

But, there is a tax loop hole available. You may choose to include any of the $5250 (normally tax free) reimbursement as taxable income and then you can claim the tuition credit.  Since the American Opportunity Tax credit (AOTC) is so generous, most people come out ahead doing this.  For details, see:

https://ttlc.intuit.com/community/college-education/discussion/how-to-fill-1098-t-if-employer-paid-f...