Taxpayer Relief Act

Taxpayer Relief Act

The Taxpayer Relief Act of 1997 (TRA97) introduced two new education tax credits: the Hope Scholarship Credit and the Lifetime Learning Credit. These credits may help families offset the costs of higher education by reducing their income tax. To determine if you are eligible to claim either of the credits, please refer to IRS Form 8863, Publication 970, or Notice 97-60.

The following information is provided as a general review of these credits and should not be construed as tax advice. If you have questions concerning your eligibility for these credits, you should consult with your tax accountant or other financial advisor. See also the resources listed below for additional information.

Hope Scholarship

The Hope Scholarship Credit is available for "eligible students" for the first two years of post-secondary education. It provides a credit of up to $1,650 per student for [?] qualified tuition and related expenses. To be eligible, students must be enrolled at least half-time in a degree or certificate-granting program. The Hope credit is available for expenses paid after December 31, 2002, for academic periods beginning after that date. For more information, go to: http://www.irs.gov/publications/p970/ch02.html#d0e2078

Lifetime Learning Credit

The Lifetime Learning Credit is more broadly applicable to students pursuing any post-secondary education to acquire or improve job skills, and is available if a student is enrolled for less than one-half the normal course load. Each taxpayer is allowed a maximum of $2,000 per year. This credit applies to expenses paid after December 31, 2002, for education furnished in academic periods beginning after this date and is available for an unlimited number of taxable years. For more information go to: http://www.irs.gov/publications/p970/ch03.html

What is IRS Form 1098-T?

An eligible educational institution that receives qualified tuition and related expenses on a student's behalf must furnish to that student a copy of Form 1098-T, the Tuition Payments Statement. This statement helps you determine whether you, or the person who may claim you as a dependent, may be eligible for the new Hope Credit or Lifetime Learning Credit. Taxpayers are not required to include the form with their tax return. For a replacement copy of the 1098-T that was sent to you, go to https://www.tcrs.com and follow the steps for student access.