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Old 01-31-2009, 01:46 PM
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Employer and Scholarship paid tuition

I took a class that my work paid for, and I got a scholarship to help with the cost for them. They didn't put it on my W2. How is this handled tax-wise? Do I need to claim all of that as income? Is it taxable? I got a 1098T.



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Old 02-02-2009, 12:21 AM
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According to the IRS tax code, if an employee received an ''educational assistance" from their employer (under an educational assistance program that is established by their employer), the employee may exclude up to $5,250 of those benefits each year.

Thus, if your employer paid an amount below $5,250 that was consistent with its established educational assistance program, this amount would not be included as part of their employees wages, tips, and other compensation shown in box 1 of your Form W-2.

If the tuition or class fees were paid to you was below this amount, clearly your employer would not have reported this amount to the IRS or included this amount on your W-2. Thus, you would not have to pay any tax on amounts paid for tuition or educational reimbursement paid by your employer that is below $5,250.

If, however, your employer had paid more than $5,250 towards your educational benefits during the 2008 tax year, you must generally pay tax on the amount's paid over $5,250. Your employer should include in your wages (Form W-2, box 1) the amount that you must include in income.

The 1098T is an acknowledgement from the Educational facility that either you had paid directly or amounts paid on your behalf, an amount representing the total fees for the educational course that you had enrolled during tax year 2008. This amount included on this form does not mean you owe taxes on this amount!

The amount included on Form 1098T would enable you to either claim an educational deduction or claim a tax credit on your personal tax return.

You would provide this 1098T to your Tax adviser or CPA during tax time to determine whether or not you would first qualify for any education and tuition deduction and if so, whether or not you would be able to claim the life time educational tax credit.

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Old 01-25-2011, 06:24 PM
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Question...

So what if the employer did not include it in the wage/tips/etc but included the amount in box 14 other as payment in kind. They made me have extra taken out of my check, not taxes on the extra, in the total amount that was overpaid which was $3138.87. I think they did it wrong. Any help would be appreciated.

koifish



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