Higher Education Tax Credit?

Question

I am a full-time employee working towards a M.S. part time. I will be filing as Single, and no one can claim me as a dependent.

Am i still eligible to get the higher education tax credit (either Hope or Lifetime Learning) if my work is paying for my tuition?

Answer 1

You cannot get a credit for tuition that is paid by your employer, unless the employer includes the amount of tuition in your taxable wages. It is unlikely that your employer is doing this, since the employer would have to pay payroll taxes on this money.

If you have additional tuition and fees that you paid for which you were not reimbursed, you can get the Lifetime Learning Credit. You may alternately take a Tuition and Fees deduction for tuition you paid. There are income limits to both of these tax benefits.

Since you education appears to be work-related, your unreimbursed expenses related to your education may be deducted as unreimbursed employee expenses on Schedule A, subject to 2% of your AGI. These expenses include your transportation to class, parking, equipment, books, and supplies. You can also take the Schedule A deduction for any amounts that you cannot use for the LLC or Tuition and Fees deduction.

Answer 2

Not if your work is paying for it - you only get the credit for tuition and fees that you pay out of pocket.

You wouldn't be eligible for a Hope credit, but if you do end up paying your own tuition and fees you could probably take a Lifetime Learning credit.

Answer 3

I would only add that if your employer is incuding the tuition paid in your taxable wages, you can include those costs when computing the Lifetime Learning Credit or tuition deduction.