IRS Tax Credit Information

HOPE Scholarship and Lifetime Learning Credits

The Taxpayer Relief Act of 1997 provides taxpayers two new non-refundable tax credits for payments made for qualified tuition and related expenses for post-secondary education - the HOPE Scholarship Credit and the Lifetime Learning Credit.

The HOPE Scholarship Credit allows taxpayers to claim a maximum credit of $1,500 for expenses paid on behalf of the taxpayer, the taxpayer's spouse, or a dependent for the first two years of post-secondary education at an eligible institution. The student must be enrolled on at least a half-time basis for at least one academic period during the year for the expenses to be qualified.

The Lifetime Learning Credit allows taxpayers to claim a maximum credit equal to 20 percent of up to $5,000 of expenses ($10,000 beginning in 2003) incurred during the taxable year for qualified tuition and fees for eligible students for post secondary education, including any course of instruction to acquire or improve job skills.

Both credits are phased out for taxpayers with modified adjusted gross income in excess of limits established by the IRS. It is the responsibility of the taxpayer or his or her tax advisor to determine if the amounts paid qualify for one or more credits in any tax year.

For additional information, contact the Internal Revenue Service at 1-800-829-1040 or http://www.irs.gov/prod/forms_pubs.