Income Limits for Hope Scholarship
and Lifetime Learning Credit
The full value of both education tax credits is available to married taxpayers filing jointly with a modified adjusted gross income (MAGI) of $82,000 or less and to single taxpayers with a MAGI of $41,000 or less. The amount of the credits is gradually reduced if the taxpayer's MAGI is between $82,000 and $102,000 for a joint return ($41,000 and $51,000 if you file a single return). Once the married taxpayer's MAGI exceeds $102,000 or the single taxpayer's MAGI exceeds $51,000, no eligibility remains. Credit cannot be individually if the filing status is married and the taxpayers are filing separate or the student is claimed as a dependant on another person's tax return (such as a parent). Taxpayers cannot use both credits for the same student in a single year. Tax credits maybe combined with tax-free withdrawals from Coverdell ESA as long as the credits are claimed for different expenses than those paid from the other tax credits. Individuals should save their records of tuition and financial aid for tax purposes. Colleges and universities will need to collect Social Security numbers from all students so they can issue information reports to assist families when taxes are filed.
Nonresident aliens should consult a U.S. tax advisor for guidance on tax credit eligibility.
FOR MORE INFORMATION ON EDUCATIONAL TAX AND SAVINGS OPTIONS, VISIT THE FOLLOWING WEB SITES:
- Internal Revenue Service, Publication 970, Tax Benefits for Higher Education www.irs.gov/pub/irs-pdf/p970.pdf
- TCRS Tax Credit Reporting Service http://tcrs.com
- For general information on TRA97 or to view/print a copy of your University of Alabama 1098-T go to www.1098T.com