Hope Tax Credit
|
| For the 2009 and 2010 tax years, the Hope credit has been modified to the American Opportunity Tax Credit- an expanded college tax credit (link to information at the bottom of the page). In 2011, unless Congress passes legislation extending the new government tax credits, the old terms will be back in effect. |
Eligible students for the Hope college tax credit are those who have:
- been enrolled at least half-time in a degree, certificate or otherwise recognized credentialed program for a semester that started in the tax year
- not already taken this education tax credit for two years
- not completed their first two post-secondary years before the tax year
- been free of a drug conviction as of the end of the tax year
This tax credit also differs from the 2009 and 2010 credit in these ways:
- It is not refundable; it can only reduce the amount of federal taxes you pay
- It is worth up to $1,800
- 100% of the first $1,200 in qualified tuition and related expenses
- 50% of the next $1,200 in qualified tuition and related expenses
- It can only be used for tuition and required enrollment fees- not required course materials.
- It can only be used for the first two years of undergraduate study.
- It can only be claimed for two tax years.
- The credit can be only be claimed in full for single filers' income of $50,000; partial credit is allowed up to $60,000. For joint filers, the full credit can be claimed for incomes up to $100,000; partial credit is allowed up to $120,000.
A Hope credit amount of up to $3,600 can be taken for students who meet the special rules for the Midwestern disaster areas. In order to do this, you must:
- claim the Hope credit for at least one student at an eligible school in a Midwestern disaster area, and
- not claim the American opportunity tax credit for any student in 2009
You can claim the Hope educational credit even if the qualified expenses were paid by college loans for students.
You can also claim the credit if the student withdrew from school and these expenses were not refunded.
The Hope tax credit for 2009 has expanded income limits, but in most cases the benefits are better using the American opportunity tax credit.
return from Hope tax credit to college tax credit (American opportunity)
return from Hope tax credit to college loan consultant homepage
