1098-T filing and reimbursement question

[ammad_h]

Hi,

I took a course from University from October 2019 till 20th December 2019 and paid from my pocket 960$.

My employer reimburse full amount i.e. 960$ in January 2020.  [i.e. In the next tax year]

My question is:

Should I enter 1098-T form in my tax return filing for year 2019? As amount was paid in 2019.

OR 

Since amount is reimbursed so i don't need to enter 1098-T in my Tax return for the year 2019?

[tygrtchr]

You can do it either way:  file the amount on 1098-T this year and show the repayment from your employer next year (since you deducted it the year before).  Check with your employer to see if he/she is going to send you a 1099-MISC next year (or add it to your W-2) for the reimbursed tuition.  If your employer is NOT going to give you a statement showing the tuition as a reimbursement, then you don't need to worry about it.  Make SURE the reimbursement is NOT going to be counted as "other income" from your employer next year before you ignore the 1098-T for 2019.

[Hal_Al]

Just don't enter the 1098-T.  The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return.

You have a choice (actually a tax loop hole). You can claim nothing on your 2019 tax return, since it will be reimbursed in 2020. Or, you can claim a tuition credit, because you are out-of-pocket. The lifetime learning credit (LLC) is worth 20% of the tuition cost.  If you're in a lower tax bracket you could come out a few dollars ahead. 

It may get a little complicated reporting the 2020 reimbursement  next year. The reimbursement, next year,   goes on line 8 of form 1040 (schedule 1) as "Taxable Reimbursement". TurboTax can not automatically pull that from your w-2. You have to enter it manually. In TurboTax enter at::

Federal Taxes Tab

Wages and income

Scroll down to:

--less common income

---Misc Income, 1099-A, 1099-C..... (Press start)

----On the next screen, select Other reportable income

-----Two screens in, type Tuition reimbursement  and $960

[ammad_h]

Reimbursement was happen with regular salary on 31st Jan 2020, and paycheck have statement written "NON-TAXABALE" in front of 960$ column. 

[Hal_Al]

Yes, it is non taxable, for 2020, as long as you did not claim a tuition credit on your 2019 tax return. 

[ammad_h]

So one last Question:

So how i can i make sure that when running Turbo tax for the year 2020, system is picking/calculating 960$ as non Taxable income, assuming W-2 for 2020 have this entry mention correctly. 

Does turbo tax have feature to cover this?

[Hal_Al]

The $960 will not be included in box 1 of your 2010 form W-2; so it will not be included in either reportable income or taxable income.