Reimbursed Tuition

[Pacun]

Company reimburses $6,000 or whatever the IRS limit is. Company uses fiscal year that ends June 30th. Employee spent $6000 in tuition and got reimbursed in 2007, but W-2 does not show that amount because it was reimbursed after June 30th. Employee will graduate before June 30th 2008 and will spend another $6,000 on Tuition, which will not be reimbursed because of IRS limit.

In 2007 employee got reimbursed $6K but W-2 shows nothing. In 2008, employee will get nothing reimbursed but W-2 will show $6K that was reimbursed. In this situation, employee will be get reimbursed 6K and he will be able to use 6K for education credit.

I know I have to follow the rules regardless of what the W-2 reads but that leaves room for an audit. Any suggestion?

[lbbwest]

Company reimburses $6,000 or whatever the IRS limit is. Company uses fiscal year that ends June 30th. Employee spent $6000 in tuition and got reimbursed in 2007, but W-2 does not show that amount because it was reimbursed after June 30th.

W2 amounts reflect CALENDAR YEAR irregardless of company's fiscal year.

Employee will graduate before June 30th 2008 and will spend another $6,000 on Tuition, which will not be reimbursed because of IRS limit.

IRS limits based on CALENDAR YEAR, (matching W2, irregardless of fiscal year.)

In 2007 employee got reimbursed $6K but W-2 shows nothing. In 2008, employee will get nothing reimbursed but W-2 will show $6K that was reimbursed. In this situation, employee will be get reimbursed 6K and he will be able to use 6K for education credit.

I know I have to follow the rules regardless of what the W-2 reads but that leaves room for an audit. Any suggestion?