Hope Scholarship and Lifetime Learning Tax Credit Information
Bowling Green State University is required to provide a 1098-T document each year to registered students as a reminder about the possibility that students and/or parents may be eligible for new federal income tax credits that could reduce your federal income tax liability by as much as $2,000.
Two tax credits, the Hope Credit and the Lifetime Learning Credit, took effect in 1998 to help families reduce out-of-pocket
expenses for tuition and certain expenses paid to a post-secondary institution that participates in the federal student aid
programs.
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The Hope Credit provides a credit of up to $1,650 for each student who is enrolled at least half-time in one of the first two years of post-secondary
education. This credit can be claimed for only two taxable years.
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The Lifetime Learning Credit provides a credit up to $2,000 per year for a student taking courses, including graduate-level degree work. This credit can
be claimed for as long as the student is enrolled in an eligible institution.
Who qualifies for these credits and what are the income limitations?
If you or your parents or guardian are paying for higher education costs for yourself or for members of your family and if your (or your parents' or guardians' who claim you on their tax return) modified adjusted gross income (found on your
IRS Form 1040, line 34 or IRS Form 1040A, line 21) is less than the income limitations below, you may qualify for Hope and Lifetime Learning tax credits.
To qualify, your adjusted gross income (MAGI) must be:
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Less than $57,000, if you are single
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Less than $114,000, if you are married and file a joint return
The college you attend cannot determine if you qualify for one of these tax credits or the amount of the credit due you. If you believe you might qualify,
you should obtain IRS Publication 970 and IRS Form 8863 and review the criteria carefully. To obtain copies call 1-800-TAX-FORM.
What is the basis for determining the amount of tax credit?
The tax credit amounts are determined by the amount you paid for eligible tuition and related expenses and your income.
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The amount of the Hope Credit is 100% of the first $1,100 plus 50% of the next $1,100 you paid for each eligible student's qualified tuition and related
expenses from January 1, 2007 to December 31, 2007. The maximum credit is $1,650 per eligible student for whom you paid at
least $2,200 of qualified education expenses.
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The amount of the Lifetime Learning Credit is 20% of the first $10,000 you paid for qualified tuition and related expenses for any eligible students from January 1,
2007 to December 31, 2007.
IRS Publication 970 explains which tuition and fee expenses qualify and which payments qualify for the tax credits. To receive either tax credit,
you must account for and document the amount you have paid for tuition and expenses on IRS Form 8863 and file it with your federal income tax return.
To calculate your tax credit, consult or your tax professional. You can determine the amounts from your own records of the
tuition bills you paid in 2007 and your receipts.
Your school provides IRS Form 1098-T to document your enrollment and whether or not you are a graduate student. Keep this form with your tax records. Forms will
be mailed by January 31, 2008.
Where can I get more information?
See IRS Publication 970 and IRS Form 8863 for more information. To obtain copies, call 800/TAX-FORM. You may also want to consult a professional tax advisor or resource.
After you have read IRS Publication 970 , and you have questions about your IRS 1098-T , you can contact your institution at the institution contact number on the IRS 1098-T or feel free to call the Hope/Lifetime help line at (419) 372-1098 between February 1 and April 15 each year.
For a blank 1098-T form, click here.
