Hope Credit Overview
What Is the Hope Credit?
The Hope Tax Credit is an education tax credit that can be applied to your annual
tax filing. Tax credits reduce the amount of money you owe in taxes, which will
add some money to your tax return. The Hope Credit can give you a tax credit of
up to $1,800 a year!
The total amount of your Hope Credit depends upon the following factors:
- Your family's income;
- The amount of qualified tuition and fees you or your parents have paid; and
- The amount of student aid you have received from scholarships and grants.
The Hope Credit is very similar to the
Lifetime Learning Tax Credit,
but you cannot claim both credits in the same year.
During the 2009 and 2010 tax years, the Hope Credit will be replaced by the
American Opportunity Tax Credit.
The American Opportunity Tax Credit is similar to the Hope Credit, but the eligibility
requirements are not as strict and it offers greater benefits.
Hope Credit Eligibility
To find out if you are eligible for the Hope Credit, answer the questions below.
If you answer “yes” to all three questions, it is likely that you qualify for the
Hope Credit!
- Are you in your first or second year of college?
- Are you enrolled at least half-time?
- Is your income (or your parents' income if you are a dependent) less than $58,000
if filing singly or less than $116,000 if filing jointly?
To claim this credit, you must fill out IRS Form 8863 using the 1098-T statement
sent by your college. Colleges are required to send you your 1098-T statement by
January 31.