Q. How do I file now that the W-2 is essentially incorrect?
A. It is not incorrect. The income is taxable.
But, since you have paid tax on that amount, you may use that amount to calculate a tuition credit.
Q. The education I receive qualifies as working condition fringe benefit, so shouldn't it be considered non taxable?
A. Maybe. But your employer must treat it as such. That must be handled by the employer, prior to issuing your W-2. When it is treated as a working condition fringe benefit, no income is added to your W-2, and your employer takes a business deduction. There is no way for you to declare it as non taxable income, when you file your tax return.
