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Do I still qualify for a Lifetime Learning Credit under the following conditions?

1. I meet all of the eligibility requirements.
2. My employer reimbursed me for all of the qualified
expenses tax-free (since it met the IRS rules).

I think I might still qualify because IRS Pub. 970 states:

"Education assistance benefits do NOT include payments
for the following items.

1. ...
2. ...
3. Graduate-level courses that begin after June 30,
1996, and are normally taken under a program
leading to a law, business, medical, or other
advanced academic or professional degree."

Since my education expenses meet the conditions in #3,
I (incorrectly???) interpret this to mean that my
employers reimbursement doesn't preclude me from
taking the credit. Is this a correct interpretation,
or am I missing something?

Thanks!
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I think that is correct. Somewhere in Pub 970 there is also a line that says you can take a credit even if you get reimbursed by your employer. I did my taxes using WebTurboTax which basically figures everything out for you, and no where did it ask me if I got reimbursed for my education expenses.
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The publication I read indicates that any education credit expenses claimed must first be reduced by any tax free funds used to pay them. It specifically says scholarship, grants, but may also include employer contributions not included on your w-2. I think if you do claim it, you may have to answer for it later if that information is disclosed by your employer to the IRS. Hope this helps.
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[[I think I might still qualify because IRS Pub. 970 states:

"Education assistance benefits do NOT include payments
for the following items.

1. ...
2. ...
3. Graduate-level courses that begin after June 30,
1996, and are normally taken under a program
leading to a law, business, medical, or other
advanced academic or professional degree."

Since my education expenses meet the conditions in #3,
I (incorrectly???) interpret this to mean that my
employers reimbursement doesn't preclude me from
taking the credit. Is this a correct interpretation,
or am I missing something?]]

This means that your EMPLOYER screwed up. The reimbursement should not have been a non-taxable benefit to you if you don't qualify. But...since they did...and you didn't effectively pay for the education expenses, it can't be used as a credit.

Sorry...
You can read more about this information in the series of posts on education credits in the Taxes FAQ area. Check it out.

TMF Taxes
Roy

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[[I think that is correct. Somewhere in Pub 970 there is also a line that says you
can take a credit even if you get reimbursed by your employer. I did my taxes
using WebTurboTax which basically figures everything out for you, and no
where did it ask me if I got reimbursed for my education expenses.]]

Huh???

Here is a quote directly from Pub 970...you must have missed it...

"Adjustments to qualified expenses. If you pay higher education expenses with certain tax-free funds, you cannot claim a credit for those amounts. Tax-free funds could include scholarships, Pell grants, employer-provided educational assistance, veterans' educational assistance, and any other nontaxable payments (other than gifts, bequests, or inheritances) received for educational expenses. You can, however, claim a credit for expenses paid with the student's earnings, loans, gifts, inheritances, and personal savings."

If the education expenses were provided to you by your employer via an education assistance program, they are non-taxable to you and not available for the credit.

TMF Taxes
Roy
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