Beginning January 1, 1998, taxpayers
(students or their parents) may be eligible to claim a
nonrefundable Hope Scholarship Tax Credit against their
federal income taxes. The Hope Scholarship Credit may be
claimed for the qualified tuition and certain related
expenses (not housing/dining) of EACH student in the
taxpayer's family (i.e., the taxpayer, the taxpayer's
spouse, or an eligible dependent) who is enrolled at least
halftime in one of the first two years of post-secondary
education and who is enrolled in a program leading to a
degree, certificate, or other organized educational
credential. The credit that may be claimed varies, depending
on the family and student financial situation, but may be as
much as $1,500 for a freshman or sophomore.
Another tax credit known as
the Lifetime Learning credit applies to junior, senior
and/or graduate students enrolled at least halftime in an
institution of higher education. Congress has established
that the Lifetime Learning Tax Credit begins for payments
made after July 1, 1998.
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