The Hope Credit is a tax credit that you may be able to claim against your federal income taxes for qualified tuition and expenses paid during the tax year.
The Hope Credit may be especially useful for adult e-learners who are just beginning their college study as it may only be claimed for the first two years of your higher education. The Hope Credit also may only be claimed for students enrolled at least half-time in a program that leads to an undergraduate degree or other recognized education credential.
The Hope Credit is available only for the first two years of a student's higher education for a maximum of $1,500 per year. However, this maximum is for each eligible student listed on a tax return. Thus, you could potentially claim the Hope Credit for your own higher education expenses as well as those you paid for your dependent in a single tax year.
You cannot claim the Hope Credit if you had a felony drug conviction on your record at the end of the tax year.
Only one tax credit, Hope or Lifetime Learning, can be claimed against your higher education expenses for a particular tax year. In addition, you may not use either credit if you claim the Tuition and Fees Deduction.
Your income level may affect the amount of the Hope Credit you can claim. Any limitation on the amount of the credit is determined through calculation of your modified adjusted gross income (AGI), calculated as part of completing your tax return. For more information on these levels, click here.
To claim the Hope Credit, you must complete and submit Form 8863, "Education Credits (Hope and Lifetime Learning Credits)," with your tax return. For more information on how to calculate and claim the credit, see IRS Publication 970, "Tax Benefits for Education." Click here to access the publication.
