Tuition reimbursement and lifetime learning credit

Forum|Forum|2 years ago
February 26, 2024
1 reply
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I work for a private university and am also getting my MBA partime. In 2023 my classes totalled $20,000 that the tuition reimbursement plan covered. Taxes were taken out of my paycheck for the $14,750 (total-$5250) throughout the year. My W2 includes the added tuition as income and the taxes withheld. My 1099T does not reflect any of the tuition reimbursement amounts. Is there a way that the taxes I paid or the total tuition amount can be utilized for the Lifetime Learning Credit?

DavidD66

Sort of. Your company can reimburse you up to $5,250 in tuition and other costs. Anything above that is taxable and included in your income. Because that amount was included in your taxable income, it is considered your after tax money. That amount you paid tax on (in your case ($14,250) can be used to claim the tuition credit.

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TL87Author

Thanks for the response- so to clarify when entering amounts in TurboTax I would add the $14,750 to the 1099T box 1 amount? and it's ok for me to change that amount or do I need the university to amend it?

Hal_Al

Employee

What is in boxes 1 and 5 of your 1098-T?

In your statement " Taxes were taken out of my paycheck for the $14,750 (total-$5250) throughout the year", what does "(total-$5250)" mean? Is it just coincidental that the amount of withholding is exactly the same as the tax free portion of the tuition reimbursement.

What you describe is not "the way it is usually done". Universities (unlike other employers) are allowed to do tuition remission totally tax free.