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 ?
The Hope Scholarship Credit is available only for the first two years (AARA 2009 expands to four years for 2009 and 2010) of postsecondary education, and can be used in only two (four) taxable years.
In addition, the Hope Scholarship Credit is limited by the amount of the claimer's income.
The Lifetime Learning Credit permits a credit of 20% of qualifying expenses (up to $10,000 per year) incurred in a year in which the Hope Scholarship Credit is not claimed with respect to a given student.
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.
Note: The Hope Scholarship Credit, the Lifetime Learning Credit, as well as taxfree withdrawals from Education IRAs, are mutually exclusive.
Specifically, the Hope scholarship credit and the lifetime learning credit are accessible through Sec.
It cannot be taken if the Hope Scholarship Credit or Lifetime Learning Credit is taken, or if the taxpayer's filing status is married filing separately.
This "deduction" may not be taken in the same year that the Hope Scholarship Credit and Lifetime Learning Credit are taken for the same student.
The education loan interest deduction, Hope Scholarship credit, Lifetime Learning credit, education IRA and qualified state tuition programs can significantly reduce the cost of higher education.
The Hope Scholarship Credit, a tax credit that allows parents to write off part of their children's college tuition, is yet another new law on the books.
111-5 (ARRA), includes an expansion of the Hope scholarship credit that will provide additional support to many American families that have members attending postsecondary educational institutions.