Lifetime Learning credit and tuition reimbursement

Q. My company reimbursed $4000 as an employee benefit (tuition reimbursement), am I still eligible for lifetime learning credit in this case?

A. No, if the  reimbursement was a tax free benefit and the $4000 was your total tuition. 

Q. My tuition was $19,149 and my employer reimbursed me $4000 of it, tax free. Am I still eligible for lifetime learning credit (LLC)in this case?

A. Yes. You paid $15,149 out of pocket and that qualifies you for a tuition credit.  It only takes $10,000 of tuition to qualify for the maximum $2000 LLC.  The fact that your employer paid some of your tuition does not disqualify you from claiming the credit.  You just can't count the money they paid, in calculating the credit

Q. My tuition was $19,149 and my employer reimbursed me the whole amount. Am I still eligible for lifetime learning credit (LLC)in this case?

A. Yes, most likely. By law, you employer can only reimburse you $5250, tax free. That means, the other $13,899 (19149 - 5250 = 13899) will be included in box 1 of your W-2, as taxable income. This means that you effectively paid $13,899 of tuition with YOUR after tax money.  As such, you may use $10,000 (the maximum allowed) to calculate and claim the LLC, on your tax return.