Products: Education Savings Products: Tax Credit and Deductions
Hope Scholarship Credit (Hope Credit)* is a nonrefundable tax credit of 100% of the first $1,100 and 50% of the next $1,100 (for 2007) for each of the first two years of post-secondary tuition and fees. The maximum annual credit is $1,650 per eligible student. A student must be enrolled in a program that leads to a degree, certificate, or other recognized educational credential and must take at least one-half of the normal full-time workload for course of study for at least one academic period beginning during the tax year. To qualify, a student must not have completed the first two years of post-secondary education at an eligible institution. Hope Credit can only be claimed for two tax years for any one student and is subject to a phase-out when income exceeds certain amounts.
Lifetime Learning Credit* This credit applies to tuition and fees for undergraduate, graduate, and continuing-education course work. A family can claim on its tax return a credit equal to 20 percent of $10,000 of educational expenses; so the maximum benefit is $2,000 each tax year. Eligible education expenses are offset by scholarships, grants, and other tax-free tuition benefits. The Lifetime Learning credit is available for an unlimited number of years.
The deduction is phased out at a modified AGI of $50,000-65,000 ($105,000-$135,000 MFJ). No deduction is available if taxpayer's filing status is MFS or if taxpayer is claimed as a dependent by another taxpayer. A student must take at least one half the normal full-time work load in a degree, certificate, or other qualified program to be eligible.
*Check with your tax adviser for specific information. Coordination of above indicated credits and exclusions may be required. FMIC is not a tax advisor and cannot give out specific tax-related advice.
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