EDUCATION TAX CREDITS (Formerly Taxpayer Relief Act of 1997) Hope Scholarship and Lifetime Learning Credits
You may be eligible to claim a tax credit on your 2003 federal tax return if you paid Cheyney University of Pennsylvania for qualified educational expenses during calendar year 2003. The Taxpayer Relief Act provides for two major tax incentive programs regarding higher education:
- The Hope Scholarship Credit
- The Lifetime Learning Credit
The Hope Scholarship Credit may be claimed for the qualified tuition related expenses of each student in the taxpayer's family who is enrolled at least half time in one of the first two years of post secondary education. The amount that may be claimed as credit is generally equal to 100 percent of the first $1000 of the taxpayer's out-of-pocket expenses for each student's qualified tuition and related expenses, plus 50 percent of the next $1000 of such expenses. The maximum credit a taxpayer may claim for a taxable year is $1500 for each student in the family meeting the enrollment criteria. The credit is not available for taxpayers with modified adjusted gross income over $51,000 ($102,000 for married taxpayers filing jointly).
The Lifetime Learning Credit may be claimed for the qualified tuition and related expenses of the students in the taxpayer's family who are enrolled in eligible educational institutions or for those taking classes part-time to improve or upgrade their job skills. The amount that may be claimed as a credit is $1000 of out of pocket qualified expenses for all the students in the family. The credit is not available for taxpayers with modified adjusted gross income over $51,000 ($102,000 for married taxpayers filing jointly). If the taxpayer is claiming a Hope Scholarship Credit for a particular student, none of that student's qualified expenses for that year may be applied to the Lifetime Learning Credit.
Form 1098-T (Tuition Payments Statement) will be mailed in late January 2004 to all qualifying students, if payment of qualified tuition and related expenses has been received in the applicable tax year. This tax information is also being provided to the Internal Revenue Service. The decision as to whether you qualify for either of the tax credits should be determined in consultation with your personal tax advisor or the Internal Revenue Service at (800) 829-1040. The Cheyney University of Pennsylvania cannot make this determination for you.
Institutions are required to include the following information on this form:
- The name, address, and Tax Identification Number (TIN) of the student with respect to whom payments of qualified tuition and related expenses were received during the applicable tax year
- An indication as to whether the student was enrolled for at least half the full-time academic workload;
- Information regarding whether the student was enrolled exclusively in a program or programs leading to a graduate-level degree, graduate-level certificate, or other recognized graduate-level educational credential
The requirement to report the aggregate amount of qualified tuition paid by the individual is effective during the tax year 2003. Thus, this information may be necessary to determine your tax credit.
To assist students/taxpayers in making this determination, Cheyney University of PA will include with the 1098-T form the following four categories:
- Qualified Tuition and Fees - all tuition, the general fee, and graduation fees
- Payments - all student payments, bank loans, Perkins & Nursing
- Refunds – all student refunds
- Gift Aid - all "free" financial aid such as Pell Grant, PHEAA Grant and tuition waivers, etc.
Requests for additional information, regarding student’s eligible tuition and fees for tax year 2003 must be submitted in writing by the student to the Office of the Bursar at firstname.lastname@example.org.
For more information regarding, the Federal Hope and Lifetime Learning Tax Credits, a Tax Credit Reporting Service (TCRS) phone number, the National Association of College and University Business Officers' (NACUBO) web site, and the Internal Revenue Service (IRS) web site and phone number are referenced below:
United States Department of Education - www.ed.gov/index.jhtml
IRS form 8863 for taxpayers claiming Hope/Lifetime Learning credits and instruction, visit: www.irs.gov/faqs/faq-kw102.html
Adobe Acrobat Reader is required to open form 8863 the IRS site.
More information is also available by obtaining the IRS Publication 970 "Tax Benefits for Higher Education".