General Information on the Hope
Scholarship
and Lifetime Learning Tax Credits
The
Taxpayer Relief Act of 1997 created educational tax incentives available for
certain students. To assist you in taking advantage of the Hope Scholarship or
Lifetime Learning Credits, we have prepared the following information in
Q&A format. Please contact your tax advisor for more details on your
particular tax situation.
Q: What is the Hope Scholarship
Credit?
A: As of January 1, 1998, undergraduate
students in their first two years of higher education who are enrolled at least
half-time may be eligible for an income tax credit of up to $1,500 (100 percent
of the first $1,000 and 50% of the next $1,000) for tuition and fees paid for
the first two years of post-secondary education. If the student may be claimed
as a dependent, then the person providing the student’s financial support may
be eligible to claim the credit.
Q: What are the eligibility
requirements for claiming the Hope Scholarship Credit?
A: A student is eligible for the Hope
Scholarship Credit if:
1. For at least one academic period
(semester, trimester, quarter) beginning during the calendar year, the student
is enrolled at least half-time in a program leading to a degree, certificate,
or other recognized educational credential and is enrolled in one of the first
two years of postsecondary education; and
2. The student is free of any
conviction for a Federal or State felony offense consisting of the possession
or distribution of a controlled substance.
For
purposes of the Hope Scholarship credit, a student will be considered to be
enrolled at least half-time if the student is enrolled for at least half the
full-time academic workload for the course of study the student is pursuing as
determined under the standards of the institution where the student is
enrolled. The institution’s standard for a full-time workload must equal or
exceed the standards established by the Department of Education under the
Higher Education Act.
Q: What is the Lifetime Learning
Credit?
A: After
Q: What are
the eligibility requirements for claiming the Lifetime Learning Credit?
A: Any student who pays qualified tuition and related expenses to
a qualifying educational institution may be eligible for the Lifetime Learning
Credit. The specific requirements as to half-time enrollment and being in
the first two years of postsecondary education do NOT apply to the Lifetime
Learning Credit.
Q: What are
the income eligibility requirements for claiming the Credits?
A: The Hope Scholarship Credit or the Lifetime Learning Credit may
be claimed by taxpayers having modified adjusted gross income up to $53,000
($107,000 for married taxpayers filing jointly). The credit is gradually reduced
for taxpayers who have modified adjusted gross income between $43,000 and
$53,000 and between $87,000 and $107,000 for married taxpayers filing jointly.
The credit is not available to married taxpayers filing separately.
Q: Is it possible
to qualify for both the Hope Scholarship and Lifetime Learning Credits; and
if so, may I choose which one I would like to claim?
A: Yes, you may qualify for both the Hope Scholarship and Lifetime Learning Credits at the
same time. However, the qualifying expenses are the basis for claiming the Hope
Scholarship or Lifetime Learning Credit, but not both. In general, students who
qualify for the Hope Scholarship and Lifetime Learning Credits may find the
Hope Scholarship Credit to be more beneficial. However, any decision of whether
an individual qualifies for either credit, or which credit may be more
beneficial is based on that individual’s tax situation.
Q: What is Form
1098-T (Tuition Statement)?
A: Form 1098-T (Tuition Statement) is sent by the institution in
which you were enrolled and incurred qualified charges during the period from
January 1 through December 31.
The amount reported may include charges for the Spring Term if these
charges were billed during calendar year.
Q: Where can
I get more information about the tax credits?
A: Consult your tax advisor as to your particular eligibility for the credits. For more detailed generic information, refer to IRS Publication 970 (Tax Benefits for Higher Education), contact the Internal Revenue Service through their taxpayer assistance number (800-829-1040) or the IRS website at www.irs.gov. Your tax benifits are based on what you paid not what you were billed.
Q: The amount in block 2 on my 1098T does not seem to be correct. What is wrong?
A: The University of North Carolina at Charlotte reports the amount billed during the calendar year not the actual payments received. Please refer to the instructions on your 1098T form "Instructions for Student:
An eligible educational institution, such as a college or university, in which you
are enrolled and an insurer who makes reimbursements or refunds of qualified
tuition and related expenses to you, must furnish this statement to you. You,
or the person who may claim you as a dependent, may be able to take either
the tuition and fees deduction or claim an education credit on Form 1040 or
1040A for the qualified tuition and related expenses that were actually paid in
2006. Institutions may report either payments received in box 1 or amounts
billed in box 2. The amount shown in box 1 or 2 may represent an amount
other than the amount actually paid in 2006. Your institution must include its
name, address, and information contact telephone number on this statement.
It may also include contact information for a service provider. Although the
service provider may be able to answer certain questions about the statement,
do not contact them or the filer for explanations of the requirements for (and
how to figure) any allowable tuition and fees deduction or education credit that
you may claim. For more information about the deduction or credit, see Pub.
970, Tax Benefits for Education, Form 8863, Education Credits, and the Form
1040 or 1040A instructions" Please contact the Internal Revenue Service
through their taxpayer assistance number (800-829-1040) or the IRS website
at www.irs.gov for information and detailed explination of qualified tuition and fees.
Q: How do I get the amount I actually paid for my qualified Tuition and fees?
A: You have a couple of options to get the amount you actually paid for tuition and fees. You may log into your 49er express account, log into Banner Self-Service. Go to the Student Accounts tab, go to Reports, and select Summary of Account by Term. You may also come into the Student Accounts office, (2nd Floor of the Reese building) present your student ID and request a copy of your Summary of Account for the calendar year.