Question
My employer paid me additional compensation to cover my graduate school tuition, paid the tuition directly to the graduate school, and included it on my W-2 as wages. The program improves skills needed in my current field of employment but doesn't qualify me for a new trade or business. Can I claim this educational expense on my tax return and, if so, where do I claim the expense?
Answer

Because you received the additional compensation as wages, you're treated as paying the tuition yourself out-of-pocket. To determine if you can claim the educational expense, and, if so, where to claim it on your return, review the rules for the lifetime learning credit.

Also review your eligibility for taking the expense as an adjustment to income for Armed Forces reservists, qualified performing artists, fee-basis state or local government officials, eligible educators, or employees with impairment-related work expenses on your tax return. See the Instructions for Form 1040 (and Form 1040-SR), Instructions for Form 1040-NR or Instructions for Form 2106. You may need to attach Form 2106, Employee Business Expenses PDF.

See Publication 970, Tax Benefits for Education for a full list.

Additional Information
Category
Itemized deductions, standard deduction
Sub-Category
Education & work-related expenses