The Hope and Lifetime Learning tax credits are available to students or parents. Tax credits can be claimed for those paying for post secondary education for themselves, their spouse, or dependent children. Students or parents can only elect one of the education credits each year, per eligible student.
A tax credit reduces the amount of income tax students or parents may have to pay. Unlike a deduction, which reduces the amount of income subject to tax, a credit directly reduces the tax. The credits may be limited by the amount of income that a student or parent earns.
The Hope Credit
The Hope Credit is a tax credit of up to $1,500 per year per eligible student. The credit is available for:
- The first two years of post-secondary education
- Only two years per eligible student
- Students pursuing an undergraduate degree or other recognized educational credential
- Students enrolled at least half time for at least one academic period during the year
The Lifetime Learning Credit
The Lifetime Learning Credit is a tax credit of up to $2,000 per tax return. The credit is available for:
- All years of post secondary education
- Courses to acquire or improve job skills
- An unlimited number of years
A student does not need to be pursuing a degree or other recognized educational credential to receive the credit.
Students enrolled in an academic program at Duke will receive an IRS Form 1098-T indicating enrollment status and type of enrollment (graduate or undergraduate) during the calendar year. To claim either of the credits, IRS Form 8863 needs to be filed as a part of the taxpayer’s annual tax return.
IRS References: IRS Form 1098-T, IRS Form 8863, Publication 970 Tax Benefits for Higher Education