topic Should I claim the deduction from my 1098-T form if my employer pays for my tuition as a Educational Assistance benefit? in Education

Should I claim the deduction from my 1098-T form if my employer pays for my tuition as a Educational Assistance benefit?

josephb741 — Mon, 13 Jan 2020 15:35:58 GMT

Re: Should I claim the deduction from my 1098-T form if my employer pays for my tuition as a Educ...

HelenC1 — Mon, 13 Jan 2020 17:08:02 GMT

Generally, no, you won't be able to claim a credit for qualified education expenses paid with tax-free educational assistance, such as a scholarship, grant, or assistance provided by an employer.

The general rule states that "no double benefit is allowed".
You may still be able to claim the American Opportunity Tax Credit or the Lifetime Learning Credit for any tuition or fees paid out of pocket that your employer did not reimburse.
For additional information see IRS Publication 970 Tax Benefits for Education.

Re: Should I claim the deduction from my 1098-T form if my employer pays for my tuition as a Educ...

Hal_Al — Mon, 13 Jan 2020 19:52:24 GMT

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-for-a-part-of-tuition-and-i-paid-for-the-rest/00/384445#M10289