High-converting app page template for tuition reimbursement companies in New Mexico

If your employer reimbursed you with TAX FREE reimbursement you cannot claim the tuition credit. By law your employer can only give you $5250 maximum, tax free. If your tuition and other costs was less than that, and you employer reimbursed it all, you do not even need to enter your 1098-T.

If youʼve taken advantage of your employerʼs tuition reimbursement program and received a Form-1099 to account for this extra income, youʼll need to keep a few things in mind. First, the reimbursements that you received through your employerʼs program count as unearned income for tax purposes.

Report your income from employee tuition reimbursement on a W-2 depending on the amount of provided educational assistance. Do not include the benefits with an employeeʼs wages, tips, and other compensation in Box 1 of a W-2 form if the assistance is $5,250 or less.

You must generally pay tax on any educational assistance benefits over $5,250. These amounts should be included in your wages in Box 1 of Form W-2. However, if the payments over $5,250 qualify as a fringe benefit, your employer does not need to include them in your wages.

FAQs about tuition reimbursement programs You can require an employee to pay back the tuition reimbursement if they leave your company voluntarily within a set amount of time.

There are no fixed limits on tuition reimbursement. Employers can contribute however much they want. Many employers set their limit at $5,250 per year the maximum amount they can deduct from their taxes. However, employers who are especially motivated to train their workforce may be willing to contribute more.

By law, tax-free benefits under an educational assistance program are limited to $5,250 per employee per year. Normally, assistance provided above that level is taxable as wages.