The Hope Scholarship ($1,500 maximum) is a federal tax credit program. Eligible students (half-time enrollment is required) will receive a 100% tax credit for the first $1000 of tuition and required fees and a 50% credit on the second $1,000. This credit is available for the first two years of a college education. This credit is phased out for joint filers who have over $80,000 of adjusted gross income, and for single filers who have over $40,000 of adjusted gross income.
While the student must pay the cost of education, minus any financial aid and scholarship at the time of enrollment, the tax credit can be received for out-of-pocket expenses when the federal tax return is filed.
Lifetime Learning Credit
This tax credit is targeted to adults, and to students who have used allof ther Hope Scholarship eligibility. A family can receive a 20% tax credit for up to $5,000 of tuition and required fees paid.
As with the Hope Scholarship, the availability of these tax credits is dependent upon federal tax laws. Parents and students with questions about these tax credits should consult the Internal Revenue Service forms and instructions.