Thank you for replying! It is a weird scheme, I think it is so that the entire 25-26 school year is contained within the 2026 tax year for their bookkeeping. Their resources say that the fall 2025 tuition they pay counts towards my 2026 $5,250 tax-free limit because they record it in 2026, are you saying that is incorrect and it counts towards the 2025 limit because they reimbursed my account with the school in 2025?
Since the amount I actually paid in 2025 tuition was $0, and the amount reimbursed was below the tax-free limit, I don't think it makes sense for me to claim the AOTC for this year anyways because I would only be credited the ~$200 I spent on books in 2025. It does look like they're going to tax me on the tuition benefit paid to the school in 2025 as if it was paid to me in 2026, so unless it would be unwise, I will probably ignore the 1098-T from 2025 altogether and then next year report the taxable tuition benefit amount as it is recorded on my paychecks in 2026. I'm not sure how I would go about reconciling their reporting of it as income on my W-2 otherwise, since that does get reported to the IRS.
