Q. In order to claim the tuition credit, does my 1098-T need to say that amount?
A. Basically yes, but not exactly, if you know that amount was paid to the school.
The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or possibly your student has taxable scholarship income.
If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)
You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid. You will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2023 expenses".
Or if you find it easier, just change the numbers in boxes 1& 5 to what your records show. The 1098-T that you enter in TT is not sent to the IRS.
Q. I guess I'm hung up on why it is up to my employer to decide if it is a non-taxable working condition fringe benefit. I meet all stipulations in the code?
A. Starting in 2018 employees no longer get job expense deductions, including the cost of education. So you're not allowed a deduction. But, the tax code allows your employer to pay it directly and call it tax free. Apparently your employer has decided it doesn't meet the working condition fringe benefit rules.
