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Tax Credits

There are many types of tax credits available. The two most widely used programs are the Hope Tax Credit and the Lifetime Learning Credit. There are other benefits available that you may want to learn more about like the Student Loan Interest Deduction or the Tuition and Fees Deduction. For more information on these programs and more, please visit the Internal Revenue Service's website at www.irs.gov and check out
Publication 970 Tax Benefits for Education.

Hope Tax Credit

You may be able to claim a Hope credit of up to $1,500 for qualified education expenses paid for each eligible student.

A tax credit reduces the amount of income tax you may have to pay. Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax itself. The Hope credit is a nonrefundable credit. This means that it can reduce your tax to zero, but if the credit is more than your tax the excess will not be refunded to you.

The Hope credit you are allowed may be limited by the amount of your income and the amount of your tax.

For more information, please visit the website of the Internal Revenue Service at www.irs.gov/publications/p970/ch02.html.

Lifetime Learning Credit

You may be able to claim a lifetime learning credit of up to $2,000 for qualified education expenses paid for all students enrolled in eligible educational institutions. There is no limit on the number of years the lifetime learning credit can be claimed for each student.

A tax credit reduces the amount of income tax you may have to pay. Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax itself. The lifetime learning credit is a nonrefundable credit. This means that it can reduce your tax to zero, but if the credit is more than your tax the excess will not be refunded to you.

The lifetime learning credit you are allowed may be limited by the amount of your income and the amount of your tax.

For more information, please visit the website of the Internal Revenue Service at www.irs.gov/publications/p970/ch03.html.