Tax Benefits tax BENEFITS . . .
Note: the following information was adapted from the IRS website. For complete details on the following tax benefits, refer to the IRS website or consult your tax advisor.

There are two tax credits available to help you offset the costs of higher education by reducing the amount of your income tax. They are the Hope Credit and the Lifetime Learning Credit.

Who can claim these credits?
Generally, you can claim these credits if all three of the following requirements are met:

• You pay qualified education expenses of higher education.
• You pay the education expenses for an eligible student.
• The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return.

If you are eligible to claim both the Hope Credit and the Lifetime Learning Credit for the same student in the same year, you can choose to claim either credit, but not both.

If you pay qualified education expenses for more than one student in the same year, you can choose to take credits on a per-student, per-year basis. This means you can claim the Hope Credit for one student and the Lifetime Learning Credit for another student in the same year.

Comparison of Education Credits
Hope Credit	Lifetime Learning Credit
Up to $1,650 credit per eligible student This credit is 100% of the first $1,100 and 50% for the next $1,100 paid for qualified tuition and related expenses	Up to $2,000 credit per return This is 20% of the first $10,000 for qualified tuition and related expenses
Income limitations occur at a modified AGI of $57,000 for single tax filers and $114,000 for married filing jointly	Income limitations occur at a modified AGI of $57,000 for single tax filers and $114,000 for married filing jointly
Available ONLY until the first two years of post- secondary education are completed	Available for all years of postsecondary education and for courses to acquire or improve job skills
Available ONLY for two years per eligible student	Available for an unlimited number of years
Student must be pursuing an undergraduate degree or other recognized education credential	Student does not need to be pursuing a degree or other recognized education credential
Student must be enrolled at least half -time for at least one academic period beginning during the year	Available for one or more courses
No felony drug conviction on student's record	Felony drug conviction rule does not apply

• 1098-T (provided by the college)
• IRS Form 8863

If your modified adjusted gross income is less than $70,000 ($140,000 if filing a joint return) there is a special deduction allowed for interest paid on a student loan.

The student loan interest deduction is taken as an adjustment to income. This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040).

Do not rely on this table alone. See the IRS website for complete details.

Feature	Description
Maximum benefit	You can reduce your taxable income by up to 2,500.
Loan qualifications	Your student loan:
	must have been taken out solely to pay qualified education expenses, and
	cannot be from a related person or made under a qualified employer plan.
Student qualifications	The student must be you, your spouse, or your dependent
Time limit on deduction	You can deduct interest paid during the remaining period of your student loan.

Required forms:

• 1098-E (provided by the lender)
• IRS Form 1040, line 33 or 1040A, line 18

The tuition and fees deduction can reduce the amount of your taxable income by up to $4,000. This deduction may be beneficial if you cannot take either the Hope of Lifetime Learning Credit because of income limitations. Income limitations occur at modified AGI of $80,000 for single tax filers and $160,000 for married filing jointly.

Who can claim this deduction?
Generally, you can claim the tuition and fees deduction if all three of the following requirements are met:

• You pay qualified education expenses of higher education.
• You pay the education expenses for an eligible student.
• The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return.

Required forms:

• 1098-T (provided by the college)
• IRS Form 8917