How do I know if my tuition reimbursement from my employer was included on my W2 form?

[MichaelDC]

This is probably something that you may want to clarify with your employer to be sure.

By law your employer can only give you $5250 maximum, tax free. If your tuition was less than that, and you employer reimbursed it all; it’s safe to assume it does not need to be reported. You do not even need to enter your 1098-T if you have one. You have nothing to claim.

 If you got more than $5250, the amount above $5250 is usually already included in box 1 of  your w-2, as income.  Since you have essentially paid tax on that part, it  is considered your after tax money and that amount can be used  to claim the tuition credit.

If you have no out of pocket costs, you cannot claim the education credits.  If, for some reason, you left your job and were required to return pay to your employer, then you could claim the credit at that point.  Anything that you're not on the hook for (i.e. scholarships, grants, employer reimbursement) cannot be used towards qualifying funds for the education credits.

The amount that you can use for education credits is the total amount of tuition and fees paid (box 2 on the 1098) minus the amount of grants or scholarships (box 5 on the 1098) minus any amounts directly paid for by the employer, or reimbursed by the employer.

See IRS Topic 513 - Educational Expenses for further discussion: http://www.irs.gov/taxtopics/tc513.html

In TurboTax, you should report the amount spent/billed for tuition and fees on the 1098-T, regardless of who paid it.  The employer reimbursement amount should then be entered on the Scholarships/Grants screen on the Employer assistance line.  

[girigiri]

Hi: I paid $8,775 for my graduate tuition fee and my employer paid $5,265. What amount should I need to enter in the box "Employer-provided assistance amount" in the Turbo Tax.

[RobertB4444]

If your employer provided $5,265 then enter $5,265.

[girigiri]

Since the amount of $5,250 is considered as tax free and the reimbursement amount was $5,265 (they paid $15 above the threashold and the $15 is most probabily already included in Box 1 of my W2) do I need to enter $5,250 in the box "Employer-provided Assitance" in Turbo Tax?

[KrisD15]

Yes, if you are also enter education expenses, such as a 1098-T, and/or if you are applying for an education credit on your return.

No, if you are a dependent and someone else is claiming you. OR you are filing as a non-dependent but not entering education expenses for an education credit. 

If someone else is claiming you, and THEY are applying for an education credit on their return, they would need to compensate for the employer-provided assistance when they figure their credit. They could report the 5,250 as additional aid in the Education Interview in their TurboTax program, or subtract 5,250 from the education expenses they are claiming. 

IRS PUB 970

[JRyan9922]

My question is about the timing of the tuition reimbursement. We know my employer will reimburse us next tax year, but since we paid out of pocket this year, do we qualify for the lifetime education credit? Or should we not submit it for deduction since ultimately we will be reimbursed next year?

[BrittanyS]

Yes, if you paid tuition in 2024, you can still claim the credit.  You would include the amount you paid but not any additional amount paid by your employer if your employer did not make payments in 2024.  To qualify for the Lifetime Learning Credit, you must meet the following criteria:

• Be enrolled or taking courses at an eligible educational institution.
• Be taking higher education course or courses to get a degree or other recognized education credential or to get or improve job skills.
• Be enrolled for at least one academic period beginning in the tax year.

Per the IRS, "Academic Period can be semesters, trimesters, quarters, or any other period of study such as a summer school session. The school determines academic periods. For schools that use clock or credit hours and do not have academic terms, the payment period may be treated as an academic period."

See the link below for more information:

• Lifetime Learning Credit

@JRyan9922