topic Am I eligible for the American Opportunity Tax Credit if my employer pays 100% of my tuition? in Education

Am I eligible for the American Opportunity Tax Credit if my employer pays 100% of my tuition?

Nani84 — Thu, 06 Jun 2019 17:32:16 GMT

My employer pays 100% of my college tuition. I received a form 1098T through my school. After entering my form 1098T, I was told that I was eligible for the American Opportunity Tax Credit. This increased my refund by almost $2,000. I am a bit confused as to whether or not I am actually entitled to this tax credit since I am fully reimbursed by my employer for tuition. I don't want to claim the credit and later get audited or in trouble with the IRS. Any advice? Should I just leave the form off of my taxes?

In a nutshell, if the employer reimbursement is included...

Carl — Thu, 06 Jun 2019 17:32:18 GMT

In a nutshell, if the employer reimbursement is included in box 1 of your W-2, then you're good to go claiming the AOC with no issues.

It depends. If the tuition reimbursement was not included...

georgesT — Thu, 06 Jun 2019 17:32:19 GMT

It depends.

If the tuition reimbursement was not included in your W2, you should not claim that as credit.

If your employer included the tuition reimbursement in your W2, you should enter the 1098-T if you anticipate claiming an education credit.

Tuition reimbursement from your employer is not taxable, up to a limit of $5,250 per year. Your employer shouldn't include those benefits in your wages, and you don't have to include that income on your tax return, either.

If you have expenses in excess of $5250, then you may be eligible for an education credit, but continue reading.

Amounts in excess of $5,250 are taxable and must be included in income on your W-2. If the expense was for education required to keep your job, or that improves your skills in your current job, then you may take a deduction on Schedule A under Job-Related Expenses, subject to a threshold of 2% of AGI. Remember to account for the $5,250 tax-free portion of employer assistance. If your education is not related to your current job, then you can claim an education credit for the cost that exceeds your tax-free amounts. For graduate work, the two credits that apply are the Lifetime Learning credit and the Tuition and Fees deduction. You are free to choose whichever approach fits and gives you the lowest tax.

To enter education expenses in TurboTax Online Premier edition, type "education expenses" in the Search box, then select Jump to education expenses. The program will guide you through the information you need to enter.

For more information about work-related education expenses, see Employer-Provided Educational Assistance in Publication 970, Tax Benefits for Education.

Part of my tuition reimbursement ( $524.00 ) was included...

Nani84 — Thu, 06 Jun 2019 17:32:21 GMT

Part of my tuition reimbursement ( $524.00 ) was included on my W2. Does that mean I should only claim $524.00?

Yes.

Carl — Thu, 06 Jun 2019 17:32:23 GMT

Yes.

Re: Am I eligible for the American Opportunity Tax Credit if my employer pays 100% of my tuition?

alexyanu — Wed, 14 Apr 2021 15:05:50 GMT

So, I get reimbursed 2,500 from my employer for tuition reimbursement. I understand I do not need to claim that as income. My question is, do I need to reduce the amounts on my 1098-T by that amount for calculating the educational credits?

Re: Am I eligible for the American Opportunity Tax Credit if my employer pays 100% of my tuition?

AmyC — Wed, 14 Apr 2021 18:11:41 GMT

Yes. Education Benefits -- No Double Benefits Allowed | IRS states:

Take the total amount of qualified education expenses paid for the student
Subtract the amount of tax-free educational assistance the student received
Use any remaining qualified education expenses to claim an education credit.

@alexyanu

Re: It depends. If the tuition reimbursement was not included...

SAM697 — Tue, 13 Jan 2026 15:10:04 GMT

How do I figure out if my reimbursement is included on my W-2 form?

Re: It depends. If the tuition reimbursement was not included...

Hal_Al — Tue, 13 Jan 2026 23:09:26 GMT

You ask your employer's payroll dept. You may find the info on your year end pay stub and/or the pay stub for the time period when your employer disbursed the money to you or the school.

Re: Am I eligible for the American Opportunity Tax Credit if my employer pays 100% of my tuition?

hp_001 — Mon, 16 Feb 2026 02:27:06 GMT

What if my union paid in 2025 for the spring semester (2026), but payment technically was maid in 2025, and my 1098 form, I am not sure, it's literally, I can calculate how much I paid, but their payments, by the union, much higher, because it's also includes for the tuition for 2026.

Re: Am I eligible for the American Opportunity Tax Credit if my employer pays 100% of my tuition?

Hal_Al — Mon, 16 Feb 2026 03:29:57 GMT

Q. What if my union paid in 2025 for the spring semester (2026), but payment technically was made in 2025?

A. Even though the years do not match, you were still reimbursed with tax free money. Therefore, you cannot count those tuition payments for the tuition tax credit.