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March 10, 2020
Question

Education assistance - I paid tuition in 2019, but I got reimbursement from employer in Jan 2020. What should I put in the "Deductions & Credits" section for 2019

  • March 10, 2020
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1 reply

Hal_Al
Employee
March 10, 2020

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.

 

It may get a little complicated reporting the 2020 reimbursement  next year. It's best explained by example. Lets say you paid $6000 in tuition, in 2019, and use $4000 of that to claim the tuition credit ($4000 is all you need to get the maximum amount of credit on the American Opportunity Credit).

 

In 2020 you employer reimburses you $6000. On your 2010 W-2 (received in Jan 2021), he shows $5250 (the maximum allowed) of tax free educational reimbursement and $750 of taxable reimbursement. $750 will have already been included  in box 1 of your W-2 as taxable income. You now have to report $3250 (4000-750) as additional taxable income on your 2020 return. $3250 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 $3250

 

Alternatively (using the numbers in the example), you can use only $750 to claim the tuition credit in 2019. Then, you will have to do nothing with your 2020 return.