topic Re: Employee Reimbursement for tuition in Education

Employee Reimbursement for tuition

blchartier — Mon, 09 Mar 2026 07:14:58 GMT

My 1098T tuition statement totaled $1787 for 2021. (I am taking graduate-level courses) I was reimbursed $456 from my employer for tuition expenses in 2021, and it was not included on my W-2. If I had been reimbursed the full $1787, my tax refund jumped up by $2500. Why does my tax refund increase by $2500 if I were to get more from my employer?

Re: Employee Reimbursement for tuition

MaryK4 — Thu, 24 Mar 2022 02:08:55 GMT

If your employer reimbursed you $456, that is the amount you enter as provided by your employer. Educational assistance means amounts the employer pays or incurs for employees' education expenses. These expenses generally include the cost of books, equipment, fees, supplies, and tuition. Up to $5,250 of educational assistance provided to an employee under an educational assistance program is excluded from the employee's wages each year.

I'm not sure how you are entering, but if your refund should not increase by $2500. It is possible that you qualify for the Lifelong Learning Credit, but that would only be a maximum of $2000, but you did not have enough tuition paid.

Re: Employee Reimbursement for tuition

Hal_Al — Thu, 24 Mar 2022 02:20:32 GMT

You’ve entered something wrong. $2500 is the full amount of the American Opportunity Credit (AOTC). Since you only had $1787 of tuition expense, that’s not possible. Furthermore, grad level courses are not eligible for the more generous AOTC. Your maximum credit is 20% of $1331 (1787 – 456), the Lifetime Learning Credit (LLC).

Re: Employee Reimbursement for tuition

blchartier — Thu, 24 Mar 2022 12:29:33 GMT

Thank you for your answers - once we entered the correct tuition reimbursement amount, we needed to launch the education optimizer, which properly took into account my education expenses - tuition reimbursement. After this, our tax refund was restored to the correct level.

Appreciate your help!