Hope Scholarship Credit


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Hope Scholarship Credit

A direct, dollar-for-dollar reduction in a taxpayer's tax liability for expenses paid for post-secondary education. One may apply the Hope scholarship credit for oneself, one's spouse, or a dependent child. To be eligible for the credit, one must have no more than the modified adjusted gross income designated each year, and one may not take it if one also deducts education expenses from one's income.

Hope scholarship credit.

You may qualify for a Hope scholarship tax credit for money you spend on qualified educational expenses for yourself, your spouse, or a dependent child.

To qualify, the student must be enrolled at least halftime in the first or second year of a qualified higher education institution pursuing a degree or other credential.

Qualified institutions include liberal arts colleges, universities, and vocational, trade, or technical schools. If two qualifying students are enrolled at the same time, you may take two Hope tax credits.

To qualify for this credit, your modified adjusted gross income must fall within the annual limits that Congress sets. Those amounts tend to increase slightly each year.

If you claim the credit while you're taking withdrawals from tax-free college savings plans such as a Section 529 plan or an education savings account (ESA), you'll have to plan carefully. Your withdrawals will lose their qualified status and be subject to tax and penalty if you use them to pay for the same expenses for which you claim the tax credit.

You can't take the credit, either, if you claim a tuition and fees deduction in calculating your adjusted gross income.

Hope Scholarship Credit

A nonrefundable credit of up to $1,500 per qualified student for tuition and fees paid for the first two years of post-secondary education. Students attending school in the Gulf Opportunity Zone may qualify for a credit of up to $3,000 for 2005 and 2006. See Form 8863.
References in periodicals archive ?
IRC section 25A suggests that if a student qualifies as another taxpayer's dependent, only the parents (or supporting taxpayer) can claim the Hope Scholarship credit, not the student.
Measures which are important now are the Hope Scholarship Credit and the expansion of IRA withdrawals.
Hope Scholarship Credit Tax credit of up to $1,500 per student.
The Hope scholarship credit established a nonrefundable credit for higher education (Sec.
The Hope Scholarship Credit is intended to defray the first two years of college expenses, for a maximum benefit of $1,500 per student.
Exhibit 2: Adjusted Gross Income Limits for Education Benefits Provision AGI Phaseout Range Hope scholarship credit Single: $40,000 to $50,000 Married filing jointly: $80,000 to $100,000 Lifetime learning credit Single: $40,000 to $50,000 Married filing jointly: $80,000 to $100,000 Education IRA Single: $95,000 to $110,000 Married filing jointly: $150,000 to $160,000 Traditional IRA withdrawal No limit without penalty Education loan interest Single: $40,000 to $55,000 Married filing jointly: $60,000 to $75,000 Qualified state tuition programs No limit
For the first time ever The Taxpayer Relief Act of 1997 (in Code Section 25A) introduced tax credits for higher education, the Hope Scholarship Credit for the first two years of college and the Lifetime Learning Credit for any education, full or part-time beyond the first two years of college.
There has been a fair amount of publicity surrounding tax credits available for tuition and fees paid to universities and other institutions of higher education, like the Hope Scholarship Credit and the Lifetime Learning Credit.
25A--the Hope Scholarship Credit (Hope Credit) and the Lifetime Learning Credit (Learning Credit).
You may be eligible for the Hope Scholarship Credit and Lifetime Learning Credit, which are education-related tax breaks.
1, 1998, qualifying taxpayers may claim the Hope Scholarship Credit against their Federal income tax liability.
The Hope Scholarship Credit can reduce your tax bill up to $1,500 per student per year but is only available for the first two years of college or vocational education.