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RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8784
Experience:  CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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Is tuition assistance from an employer counted as taxable?

Resolved Question:

Is tuition assistance from an employer counted as taxable income? I received tuition assistance last year for school. The school sent me a form 1098-T for educational expenses. When I file, do I need to subtract what my employer paid from the amount shown on the 1098-T? If so, should I submit an amended return for last year since I did not do this? Also if not, where do I put it? My employer tells me this amount is not included on my W2.

I want to make sure I get this right.

The amount is less than $1,500. Thanks!

Submitted: 7 years ago.
Category: Tax
Expert:  RD replied 7 years ago.

Tuition assistance up to $5,250 is not taxable as wages. Amount over this amount is reported as taxable income on W-2. If this amount is not included on W-2 than it was not taxable.

If that is the case than you cannot take a deduction for education credit for this amount. If you have taken such a credit than you need to amend and correct your tax return.

Customer: replied 7 years ago.
Just to be clear: So, because the amount is not on the W-2 (for both last years or this year), then I don't have to worry about it and I can still claim credits that are based on the 1098-T? (Both years are less than $5,250.
Expert:  RD replied 7 years ago.

That is not correct.

Since your employer paid for the education expenses- you cannot claim the education credit.

The education fees was not paid by you but your employer.

Hence, you need to amend and correct the tax return if you claimed such credits.

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