Tuition paid in 2021, reimbursed in 2022

Forum|Forum|4 years ago
February 21, 2022
2 replies
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Hi there!

So I am a part-time grad student. I paid $3,000 in tuition in 2021, and my employer reimbursed me for $2,250 of it but the reimbursement did not come until 2022. How should I report this for 2021? Will I need to do anything special for my 2022 tax return?

DavidD66

An employer can provide up to $5,250 per year in tax free educational assistance. As long as the amount you receive in a calendar year didn't exceed $5,250 you don't have to report anything. Benefits in excess of $5,250 must be reported on your W-2 by your employer and would be considered earned income.

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Hal_Al

Employee

Q. How should I report this for 2021?

A. You treat the $2250 as having been received in 2021. So, you may use $750 (3000 -2250 = 750) in calculating the tuition credit. This situation is covered in IRS Pub 970.

Q. Will I need to do anything special for my 2022 tax return?

A. No. You employer will treat it as a tax free benefit (since it is under $5250). If they end up reimbursing you more than $5250, in 2022, the excess will be treated as taxable income on your W-2.