Employer tuition reimbursement

Forum|Forum|4 years ago
January 26, 2022
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I got my 1098T from my school. Last year my employer reimbursed me 2000 of the 5000 in tuition. Should I deduct the 2000 from box 1? Or can I report the 1098T total in my taxes? I read that 5250 are tax free but I'm not sure if this applies.

Hal_Al

Employee

Q. Should I deduct the 2000 from box 1?

A. Simple answer: yes. You are only allowed to count $3000 (5000 - 2000 =3000) for the Tuition credit, since $2000 was reimbursed by tax free employer assistance. Yes, the first $5250 of employer reimbursement is usually tax free. You should verify that your employer treated it as tax free (it's usually obvious on your pay stub and/or W-2).

In actuality, the TurboTax (TT) interview should handle this. You enter your 1098-T exactly as received. Later TT asks about employer assistance and makes the adjustment.