How should I report my employer tuition reimbursement for 2024 courses on my taxes?

The general rule for tuition reimbursement is that you report it in the tax year you receive it, not when you took the courses. Since you received the reimbursement in February 2025, that would typically be reported on your 2025 tax return. For your 2024 tax return, you should still report your 1098-T information as it appears on the form. This means you paid $5382.70 in tuition (Box 1) and received $1250 in scholarships/grants (Box 5). You may be eligible for education tax credits like the Lifetime Learning Credit or the American Opportunity Credit based on your out-of-pocket expenses for 2024, which would be $4132.70 ($5382.70 - $1250.00). When you file your 2025 return next year, you'll need to account for the $2954.23 reimbursement you received. If it's under the $5,250 annual exclusion limit for educational assistance from employers, it's typically tax-free and won't be included in your taxable income.

I was in a similar situation last year and found https://taxr.ai super helpful for organizing my education expenses. My employer also has this weird 3-course limit per semester, and I was taking 5 courses for my MBA. The tool helped me figure out exactly how much I could claim for the Lifetime Learning Credit after accounting for my partial reimbursement that came late. It analyzed my 1098-T alongside my reimbursement documentation and showed me which expenses qualified and which didn't. Saved me from accidentally claiming too much and potentially triggering an audit.

I wanted to update everyone - I ended up trying taxr.ai after all the confusion with my tuition reimbursement timing. It was actually really helpful! The site analyzed my 1098-T and pay stubs showing the reimbursement and gave me a detailed explanation of exactly how to report everything. Turns out I was overthinking it. For 2024, I can claim the Lifetime Learning Credit on the expenses I paid minus scholarships ($5382.70 - $1250.00 = $4132.70). Then for 2025, I'll report the employer reimbursement of $2954.23 as tax-free educational assistance (since it's under the $5250 limit). The system even generated a memo to attach to my return explaining the timing difference to prevent any audit flags. Definitely cleared up my confusion about the cross-year timing issue!

For anyone struggling to get answers from the IRS about tuition reimbursement questions, I highly recommend using https://claimyr.com. I spent 2 hours on hold trying to get clarification about my similar situation with employer reimbursement timing, and it was driving me crazy. Claimyr got me connected to an actual IRS agent in about 15 minutes who confirmed exactly how to handle the reporting when reimbursement crosses tax years. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c. Saved me so much frustration and I actually got a real person who could reference my specific case.

I have to apologize and eat my words. After calling the IRS for the 5th time this week and getting disconnected again, I broke down and tried Claimyr. Got connected to an IRS agent in about 20 minutes. The agent confirmed exactly what others have said here - report the full eligible education expenses minus scholarships on my 2024 return for tax credit purposes, then when I file next year, I'll need to account for the employer reimbursement I received in 2025. She recommended keeping detailed records showing the timing difference. Honestly worth every penny just to get a definitive answer from an official source instead of stressing about it. Sorry for being skeptical earlier.

One thing nobody mentioned yet - if your employer provided more than $5,250 in educational assistance benefits during the year, you would need to include the excess as taxable income. But since your total reimbursement was $2954.23, you're well under that limit so it should all be tax-free. Also, check if your school uses the "paid" or "billed" method for the 1098-T. Some schools report amounts paid during the calendar year (Box 1), while others report amounts billed for the academic period (Box 2). This can affect which tax year you should claim education credits.

Has anyone used TurboTax for this situation? I'm having trouble figuring out where to enter my expected reimbursement information since I haven't received it yet but know it's coming.

I've been through this exact scenario with my MBA program! The key thing to remember is that you report education expenses and reimbursements in the year they actually occur, not when the courses were taken. For your 2024 return, you can claim education credits based on your actual out-of-pocket expenses: $5382.70 (tuition paid) minus $1250.00 (scholarships) = $4132.70 in qualified expenses. Don't worry about the reimbursement you haven't received yet. When you get that $2954.23 reimbursement in 2025, it will be tax-free employer educational assistance (under the $5250 limit) and gets reported on your 2025 return. The IRS doesn't require you to "claw back" education credits from previous years when you receive reimbursements later - you report each transaction in its proper tax year. Make sure to keep good records showing when you paid tuition vs. when you received reimbursement, just in case you ever need to explain the timing to the IRS. But this is actually a pretty common situation with employer tuition assistance programs that have semester limits like yours.