Spouse's college tuition

If you receive educational assistance benefits from your employer under an educational assistance program, you can exclude up to $5,250 of those benefits each year. This means your employer should not include the benefits with your wages, tips, and other compensation shown in box 1 of your Form W-2.

However, it will be included in box 5 of the 1098-T you receive from the school. It's a scholarship the school received on your behalf, as far as the school is concerned. So the amount received by the school from your employer is included in box 5 of that 1098-T.

Here's how to enter your 1098-T in TurboTax:

1. Open or continue your return
2. Select Search and enter Form 1098-T
3. Select Jump to form 1098-t

Some important tips about entering this form:

• Enter your 1098-T exactly as is, even if the amounts are wrong (this is common). You'll get a chance to correct this info and enter additional expenses later on
• Leave blank boxes blank. Don't enter 0 for any blank boxes on the form, as this generates errors
• Parents: If the student listed on the 1098-T is your dependent, enter the 1098-T on your return, even if your dependent paid the tuition
• Students: If you're not being claimed as a dependent, enter the 1098-T on your return regardless of who paid the tuition, unless it was your employer. In that case, just keep the 1098-T with your tax records.

Q. Can I deduct the tuition paid for my wife to attend college to obtain her bachelor's degree?  Her employer is paying her tuition costs and that income is not shown on her W2.

A. No.  The employer tuition assistance is a tax free benefit (up to $5250). So, you cannot claim a 2nd tax benefit (the tuition credit) based on the same money.