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February 27, 2021
Question

Employee Tuition Reimbursement

  • February 27, 2021
  • 1 reply
  • 0 views

My employer paid $7740 for teacher certification post Bachelors degree in 2020.   The reimbursement is in my employment contract as a must complete or I have to pay back the money.

 

The reimbursement is not included on my W2.

 

Additionally, the certification school provided me a $1000 scholarship.

 

What do I need to enter into turbotax in the tuition section.

    1 reply

    Hal_Al
    Employee
    February 27, 2021

    You do not need to enter the employer reimbursement, as it is a tax free employer benefit.

     

    The general rule is that an employer tuition reimbursement plan may only provide up to $5250 tax free. Anything above that should be reported on your w-2.

     

    However, what you have is not  tuition reimbursement. It's classified as job  training and the employer's plan may provide that tax free.

     

    The certification school  $1000 scholarship is a little fuzzier.  Was it reported on any document, typically a 1098-T or 1099-Misc?  Was it really a "scholarship" or just a discount on the tuition price?  A discount would not be reportable income. A scholarship that paid for  "qualified educational expenses" at an "eligible institution"  would not be reportable.  

    The school should be able to tell you if it is an eligible educational institution. In general, an eligible educational institution is an accredited college, university, vocational school, or other postsecondary educational institution, including accredited, public, nonprofit, and proprietary (privately-owned, profit-making) postsecondary institutions. Additionally, in order to be an eligible educational institution, the school must be eligible to participate in a student aid program administered by the Department of Education. If they issue a 1098-T they are probably an eligible institution.

    Enter your school at the link below, to see if it's on the dept. of education list.

    https://fafsa.ed.gov/FAFSA/app/schoolSearch?locale=en_EN

    February 27, 2021

    Thank you so much!  Very insightful and clear answer!