If my employer reimburses my tuition & then issues me a 1099 how do i reflect this on my tax return?
February 21, 2009
jsssika asked:
My employer paid for school last year and I was curious as to how I should reflect this on my tax return. They gave me a 1099 that shows the miscellaneous income for tuition. I paid the tuition and my company reimbursed me back through payroll. So, since the goverment gives education credits for school expenses how should I put this on my tax return? Do I show the tuition as misc. income and then mark the education credits as well? Or do I have to do it another way? Any tax specialists if you know please answer! I am stumped! Thanks!
My employer paid for school last year and I was curious as to how I should reflect this on my tax return. They gave me a 1099 that shows the miscellaneous income for tuition. I paid the tuition and my company reimbursed me back through payroll. So, since the goverment gives education credits for school expenses how should I put this on my tax return? Do I show the tuition as misc. income and then mark the education credits as well? Or do I have to do it another way? Any tax specialists if you know please answer! I am stumped! Thanks!
8 Responses to “If my employer reimburses my tuition & then issues me a 1099 how do i reflect this on my tax return?”
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February 22nd, 2009 at 1:00 pm
Last I heard, reimbursements were not taxable, so I don’t know what to tell you. Sorry.
February 23rd, 2009 at 10:15 am
Report the tuition reimbursement as income (miscellaneous income on Form 1040) and claim the education credits.
February 23rd, 2009 at 3:10 pm
1099 are sent to the IRS without any deductions. You will have to report the $$ as income. Sorry!
February 26th, 2009 at 5:20 am
Which means it really wasn’t a reimbursement.. they stuck it to ya.
February 28th, 2009 at 3:21 pm
you can find out by going to expresstaxrefund.com
March 2nd, 2009 at 10:09 am
Report the 1099 income on line 21. This is “unearned” income. Report the tuition expenses as work-related education which goes on Schedule A and is subject to the 2% AGI limitation. If you qualify, it may be much better to claim the tuition and fees you paid under the “Lifetime Learning Credit”.
Hope this helps!
March 3rd, 2009 at 6:34 pm
Since it was you who paid the school, if you were considered at least a half-time student in a degree program at a qualified college or university, you are allowed to claim tuition and fees expenses towards either the Hope Credit, the Lifetime Learning Credit, or the tuition and fees deduction. You may claim only one of the three. Do a comparison and choose the one which gives you the largest credit. Usually, you will receive a 1098-T from the school, showing the amounts paid.
You can exclude from your income up to $5,250 of qualified employer provided educational assistance. See chapter 11, IRS Publication 970 to see if you are eligible.
Publication 970 also includes details on the Education Credits.
You say you received a 1099-MISC showing income (for school reimbursement) from your employer. Your employer could be considering the amount paid towards your tuition as a working condition fringe benefit. You would owe taxes on the amount over $5,250 paid to you for your education by your employer. –See page 58, IRS Pub 970.
However, that income could be included in box 3 of the 1099-Misc as an award or bonus. Then you would enter that amount on the other income line of the 1040. If your employer is coding it non-employee compensation (box 7), maintaining that your time at school was paid but not employee wages, then you would enter that income on Schedule C as self employment income. Usually, the employer has not withheld federal income tax, social security tax, or medicare taxes (box 4 will be empty), and you will owe these amounts. The good thing is that you are allowed to deduct expenses needed to gain that income, so you would be able to deduct parking and mileage, and other expenses, listing them all on the Schedule C along with the income.
If instead you received a 1099-Q, that is treated differently than a 1099-MISC.
March 4th, 2009 at 11:13 am
1099 income has to be claimed under misc. income and you will owe the income tax on that amount. The good news is that you can also claim the education credits so hopefully it will balance out for you.