Education Tax Credits Help Families
The Hope Tax Credit, which may allow taxpayers to claim a non-refundable credit against their federal income taxes, may be claimed for qualified tuition and expenses of each dependent student in the taxpayer's family being claimed on the tax return provided he/she is enrolled in a degree or certificate program at least half-time. The credit is now available for all four years of undergraduate study. The credit, which has a maximum of $2,500 per student for the 2009 and 2010 tax years, is available to families with a joint income less than $180,000 or single parent households with an income less than $90,000 (credit begins to be phased out for joint incomes ranging from $160,000-$180,000 and single incomes between $80,000-$90,000). In addition, the credit is only available to permanent residents or U.S. citizens and, if tax-filers are married, to those that file a joint tax return. Forty percent (.40) of the Hope Credit is now a refundable credit, which means that you can receive up to $1,000 even if you owe no taxes. Additionally, for the 2009 and 2010 tax years, the term "qualified tuition and related expenses" has been expanded to include expenditures for "course materials." For this purpose, the term "course materials" means books, supplies, and equipment needed for a course of study whether or not the materials are purchased from the educational institution as a condition of enrollment or attendance
The Lifetime Learning Tax Credit is also available for qualified tuition and related expenses for students enrolled in eligible educational institutions. The actual amount of the credit depends on a family's income, the amount of qualified tuition and fees paid, and the amount of certain scholarships and allowances subtracted from tuition. This credit is family-based (up to $2,000 per tax return) rather than based on the number of dependents in a family as with the Hope Tax Credit. (some income cut-offs do apply).
Arcadia University will mail a 1098-T form, for tax filing purposes, to each student enrolled at the University for each calendar tax year.
The Tuition and Fees Tax Deduction can reduce taxable income by as much as $4,000. This deduction is taken as an adjustment to income and may benefit taxpayers who do not qualify for either the Hope or Lifetime Learning Education Tax Credits. Up to $4,000 may be deducted from tuition and fees required for enrollment or attendance at an eligible postsecondary institution.
Families who think they may qualify should contact their tax accountant or visit the IRS information page on the credit at http://www.irs.gov/formspubs/article/0,,id=177996,00.html.
