(LifeWire) - Hope Scholarship Tax Credit Basics:
The Hope Scholarship Tax Credit is not a scholarship; it's a government tax rebate for families paying for college. A tax-owing family may claim up to $1,650 for each eligible family member, meaning that $1,650 will be eliminated from the tax bill for every student in higher education. The amount of the Hope credit hinges on the number of students, the family's income, the amount of tuition and approved fees, and how much scholarships and grants have decreased the cost load. Taxpayers can claim the credit for expenses paid in the year of the tax return, or expenses paid for the first three months of the following year. To apply for the credit, which also applies to online distance learning, taxpayers fill out IRS form 8863.
Qualifying for a Hope Scholarship Tax Credit:
The tax credit is reserved for taxpayers with less than $57,000 individual income or $114,000 joint income who have dependents (or themselves) in higher-learning institutions. The students must be taking classes at least part-time for a minimum of one academic term en route to a degree or certificate. They must be in their first two years of enrollment. Taxpayers who meet the same attendance requirements can claim the credit for themselves if they are not a dependent on someone else's tax return. A federal or state drug felony renders students ineligible.
Learn More About the Hope Scholarship Tax Credit:
For more information about the Hope Scholarship Tax Credit, visit: www.nasfaa.org.
