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March 2, 2022
Question

Employer paid tuition after I gave them the money

  • March 2, 2022
  • 3 replies
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My employer made an arangement with my university for discounted tuition. We were to pay the employer and then the employer paid the university the tution for all that were recieving the discount. My 1098 is showing the price for my tuition and then the same price in box 5. My employer stated that my receipts for payment is sufficient to prove that I paid the full cost of the tuition myself. How do I identify that to recieve credit for this large payment?

    3 replies

    Hal_Al
    Employee
    March 2, 2022

    There is no way to "show that" on the IRS forms nor is there a reason to show it.  You just need to enter your info in such a way that TurboTax (TT) recognizes the correct amount.  The simple thing to do is just leave box 5 blank when you 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. 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.

    If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this).

     

    Alternatively,  in the 1098-T interview, you will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2021 expenses".

    March 2, 2022

    Yes, you can correct this by reporting the amount as paid by you.  If you are ever questioned, like your employer stated, you can explain the situation and provide receipts.  It would also help if you had a copy of the agreement for you to pay employer and employer pay University in order to receive a discount.

     

    However receipt of a 1098-T frequently means you are either eligible for a tuition credit or deduction.

    If you claim the tuition credit, you do need to report that you got one (the TurboTax interview will handle this) but use the financial information that you have to claim the deduction.

     

    Main point is to just keep records.

     

    @wahootree

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    March 2, 2022

    If your employer paid your tuition with pretax money, then you cannot get a tax deduction for it since you never paid tax on the funds.  It will be seen as a fringe benefit even though you gave the employer the funds,