How to Apply for the Hope Education Credit



  1. Calculate the tuition and qualified expenses you taken care of post secondary education during the tax year. Activity costs, supplies and book fees only qualify if you have to pay them in order to attend.
  2. Make sure the expenses were for any student in the first two years of schooling after senior high school. This typically means a college freshman or sophomore.
  3. Verify that the student took at least half the standard full load of course work for a minimum of one quarter or semester during the tax year.
  4. Verify how the student was in a program leading to a diploma, credential or certificate at an accredited educational organization.
  5. Make certain the student had never had a drug criminal offence conviction.
  6. Fill out parts 1 and 3 associated with Form 8863. Unless income limits apply, your credit should be all the first $1000 and half of the next $1000 associated with incurred expenses.


IMPORTANT TIPS :

  • You can use several Hope Credit during a tax year if several student qualifies.
  • You can use either the Hope Credit or the Lifetime Learning Credit for any student, but not both in the same 12 months. Use the Hope Credit, if you can, because it is limited to the first two years, whereas the Lifetime Learning Credit doesn't have time limitations.
  • When you pay tuition and qualified expenses within the year before a term starts, as in the December payment for January classes, the payment qualifies for that credit for the year in which payment had been made. Prepay these classes and get an earlier tax break.
  • You can use both the Hope and Lifetime Learning credits when they are for different students.
  • Those married and filing separately cannot make use of the Hope Credit.
  • The credit is limited at greater income levels. Household limits begin at $80, 000 with regard to married, filing jointly, and at $40, 000 with regard to single, head of household or qualifying widow.