You are allowed to deduct the amount of a payment received from your employer as reimbursement for eligible education expenses if all of the following conditions are met:
1. The payment is a reimbursement of expenses you incurred which are directly related to the attainment of higher education or career and technical education.
2. Your employer included the payment in your taxable wages reported in Box 1 of your Form W-2.
The deduction is equal to the amount of the payment included in your federal taxable income. If you deduct or exclude any portion of the payment from your federal taxable income, you may not claim a deduction for that portion of the payment.