Tuition Reimbursement year

Forum|Forum|4 years ago
January 27, 2022
1 reply
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Hello,

The $5,250 allowable per year how does that count when reimbursed? For example, I was reimbursed $4,000 for the Spring 2021 semester in July but for Fall 2021 semester my tuition was another $4,000. However, I'm supposed to be reimbursed at the end of January 2022. Will I be reimbursed the whole $4,000? like the $1,250 from tax year 2021 and the other $2750 for tax year 2022 due to being reimbursed in 2022 or how would that work?

Thanks

Not A Product Question

Hal_Al

Employee

You'll have to ask your employer (I assume it's your employer paying the reimbursement) what you will actually be be getting. There is no limit on how much they can give you. The limit is on how much can be tax free.

You employer is allowed to give you $5250 tax free per calendar year, regardless of when you took the classes. If they give you more, the excess is to be include as taxable income on your W-2. For example, if you are reimbursed $8000 in 2022, $5250 will be tax free and $2750 will be taxable income.

The next question is can you claim the tuition credit on the $8000 you paid in 2021. You have a choice (actually a tax loop hole). You can claim nothing on your 2021 tax return, since it will be reimbursed in 2022 tax free . Or, you can claim a tuition credit, because you are out-of-pocket $4000. But then, you have to report the reimbursement from your employer as taxable income on your 2022 tax return.

But, you may have to wait to see how your employer counts the $4000 2022 reimbursement. They should count only $1250 as tax free, but they may count the full $4000.