topic Education Expenses on 1098-T That were paid by employer in Education

Education Expenses on 1098-T That were paid by employer

GlennRoth — Wed, 11 Feb 2026 03:38:26 GMT

My wife is employed by a university as an adjunct professor. As part of her employment, she is encouraged to take courses through the university to be better prepared to teach those courses in the future. These courses are covered costs as a benefit of her employment.

She received a 1098-T from the university that includes an amount in box 1. When I include her as a student and provide the information, the tax burden goes up significantly. Obviously, she is not eligible for many of the credits, since she has already claimed some of them, and she isn't currently pursuing a degree. It seems strange that we would owe significantly more in taxes based on the classes that she is taking. Am I missing something?

Re: Education Expenses on 1098-T That were paid by employer

KrisD15 — Tue, 13 Feb 2024 17:14:27 GMT

On a 1098-T, box 1 reports what was paid to the school. This should have no affect on your tax liability.

HOWEVER Box 5 reports financial aid supplied to the student. If Box 5 is more than Box 1, the difference is treated as income.

Because school years and calendar years cross, it's advisable to check your records to be sure that box 5 does not contain aid that the school received in a different year. Often a school bills in December but may not receive payment until January.

Re: Education Expenses on 1098-T That were paid by employer

Hal_Al — Tue, 13 Feb 2024 17:18:36 GMT

Q. Am I missing something?
A. Yes. You need a cleared picture of what's going on there.

You don't say what's in box 5. A 1098-T is usually not issued in your situation ("These courses are covered costs as a benefit of her employment") and when it is, there's an offsetting amount in box 5. Tuition waivers are not taxable or even subject to the $5250 limit for other employers.

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.

You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T.