HOPE TAX CREDIT

The Hope Credit is tax credit. Tax credits are subtracted directly from the tax a family owes, rather than reducing taxable income like a tax deduction.A family may claim a tax credit of up to $1,500 per tax year for each eligible dependent. This can be done for up to two tax years. A family may claim up to 100% of the first $1,000 of eligible expenses and 50% of the next $1,000 for a maximum credit of $1,500. The actual amount of the credit depends on the family’s income, the amount of qualified tuition and fees paid and the amount of certain scholarships and allowances subtracted from tuition. The total maximum credit is based on the number of eligible dependents. The taxpayer must claim the eligible student as a dependent, unless the credit is for the taxpayer or the taxpayer’s spouse. The amount of the Hope Credit is phased out if your modified adjusted gross income (MAGI) is between $43,000 and $53,000 for single taxpayers ($87,000 and $107,000 for married taxpayers). You cannot claim a credit if your MAGI is $53,000 or more ($107,000 or more if you file a joint return).

To be eligible, a student must be enrolled at least half-time in an eligible program leading to a degree or certificate.

*A student may be able to take a tuition and fees deduction for their educational expenses instead of the Hope credit. You can choose the one that will give you the lower tax.

For more information regarding eligibility for the Hope Credit, please contact the RLC Business Office, your tax preparer or the IRS.