Tax Credits Save Money
The Taxpayer Relief Act of 1997 (TRA) created a number of options to help families meet the cost of a college education.
Among the tax and savings options are two educational tax credits; the Hope Scholarship tax credit and the Lifetime Learning tax credit (only one can be claimed during any tax year where modified AGI of less than $52,000/single or $105,000/mailing filing joint). Further information is available through the IRS Publication 970 or by calling 1-800-TAX-FORM (1-800-829-3676).
What is the Hope Scholarship tax credit?
A tax credit of up to $1,500 for the first two years of post-secondary education for students who are enrolled at least half-time in one academic period during the tax year.
The credit applies to all of the first $1,000 of tuition and eligible fees, and half of the next $1,000 of tuition and eligible fees.
What is the Lifetime Learning tax credit?
This credit applies to eligible tuition and fees for undergraduate, graduate and continuing education course paid. A family can claim a tax credit of up to 20 percent of the first $10,000 in educational expenses, up to a maximum credit of $2,000 each tax year.
How will RCC help?
RCC's Budget & Finance Office mails 1098-T forms by January 31 each year to students with a valid social security number who were billed during the prior tax year. The form will indicate enrollment status and the total of all tuition and fees that may qualify for an educational tax credit.
