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Hope Scholarship & Lifetime
Learning Tax Credits Information
Hope Scholarship & Lifetime Learning Tax Credits Information
Hope Scholarship
The Hope Scholarship Tax credit is a tax credit equal to 100% of the 1st $1,000 of a student's qualified educational expenses (i.e. tuition and mandatory fees) plus 50% of the next $1,000. The maximum credit is $1,500 per student in each of the first two years of a post secondary degree program. The maximum credit will increase for inflation after 2001. Students must be enrolled at least half-time during at least one academic period that begins during a tax year and cannot have had a felony drug conviction in a year that the credit applies.[ back to top ]
Lifetime Learning Tax Credit
The Lifetime Learning Tax Credit applies to qualified tuition and mandatory fees for undergraduate, graduate, and continuing educational expenses paid for the taxpayer, his or her spouse, or dependent children. The maximum credit is currently $1,000 per family per year. Starting in 2003, the amount of eligible education expenses increases to $10,000, resulting in a $2,000 maximum tax credit.
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Hope Scholarship and Lifetime Learning tax credits limitations
The Hope and Lifetime credits cannot both be claimed for the same student in the same tax year. The taxpayer may claim both credits on one tax return (for different students) but must choose which credit to claim for each individual. These credits may not be combined with tax free withdrawals from education IRAs. Scholarships, grants, and other tax free tuition benefits offset eligible education expenses. The full value of both credits is available to married taxpayers filing jointly with an adjusted gross income (AGI) of $80,000 or less and to single taxpayers with an adjusted gross income (AGI) of $40,000 or less. The tax credits phase out gradually. Once married taxpayers' AGI exceeds $100,000 or single taxpayers' AGI exceeds $50,000, they are not eligible for these credits. The income limits will be adjusted for inflation after 2001. A student who is claimed as a dependent on another taxpayer's return may not claim a tax credit on his or her own tax return. The credit will be claimed on the return of the taxpayer claiming the student as a dependent. Married taxpayers must file a joint return to qualify for the credits.
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Further Tax Information
The College does not render personal tax advice. Please consult with a tax professional to discuss your personal situation. If you have further questions, you may contact the IRS at 1-800-TAX-FORM and request Publication 970, Tax Benefits for Higher Education. This publication is also available on-line through the links provided below. These links will take you to Web sites that provide additional information:
