Hope Scholarship Tax Credit Information

• According to the Taxpayer Relief Act (TRA) of 1997, the Hope Scholarship is a tax credit which is available to the taxpayer for qualified tuition and related expenses.
• The taxpayer may be the student claiming federal tax return, or the parent of the student claiming the student as a dependent on a federal tax return.
• The student must have a high school diploma or its equivalent and be enrolled half-time or more in a program that leads to a degree or certificate for at least one academic period during the tax year.
• The Hope Scholarship tax credit can be claimed only for two tax years and applies only to the first two years of postsecondary education.
• A student cannot have a drug felony conviction on possession or distribution in a year that the tax credit is claimed.
• Education expenses paid on or after January 1, 1998, may be eligible for Hope credit.
• The credit is taken in the year expenses are paid and education either begins that year, or the first three months of the following year.
• Before calculating the credit, the taxpayer must deduct any scholarships and other tax-free financial assistance, including a Federal Pell Grant and employer - provided educational assistance. However, educational expenses paid for with loans are eligible for these tax benefits.
• The credit is indexed for inflation. Refer to IRS Form 8863 for the maximum credit amounts for your tax return.

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