I live, work and attend school in the U.S.
My employer has a tuition assistance program in place that covers 100% of tuition and eligible expenses up to $5000 per calendar year. My plan was to attend 3 half-year terms of college and get reimbursed over 3 calendar years.
I attended college the latter half of 2019 accruing $3755 in tuition with another $500 scholarship applied. Thus, I received a total reimbursement of $3255 from my employer and was paid out in 2019. I will be attending school throughout 2020 and will be paid out roughly the same amount in 2020 (July) and 2021 (January). Essentially I'll have free college which is a nice benefit, but what are the tax implications here?
I am wondering:
- Is the Employer Tuition Assistance considered financial aid?
- Do I need to report any/all of the $3255 in Employer Tuition Assistance? (up to $5,250 received is considered tax-free)
- If so, do I report the Employer Tuition Assistance as "Grants and Scholarships"?
- Should I include my grants and scholarships in income?
- For the 2020 tax year, in which I have 2 terms of tuition but receive some Employer Tuition Assistance paid out in 2021, does this get reported in 2020 or the following tax year?
- If reported in 2021, how do I report this without having had any 1098-T for the year (or will I receive a 1098-T since the school will be paid in 2021)?