For the tax year, you may be able to claim a Hope credit of up to $1,800 ($3,600 if a student in a Midwestern disaster area) for qualified education expenses paid for each eligible student. taxmap/pub17/p17-184.htm#en_us_publink100035034
To claim the Hope credit, the student for whom you pay qualified education expenses must be an eligible student. This is a student who meets all of the following requirements.
- The student did not have expenses that were used to figure a Hope credit in any 2 earlier tax years.
- The student had not completed the first 2 years of postsecondary education (generally, the freshman and sophomore years of college) before 2008.
- For at least one academic period beginning in 2008, the student was enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential.
- The student was free of any federal or state felony conviction for possessing or distributing a controlled substance as of the end of 2008.
A student who was awarded 2 years of academic credit for postsecondary work completed before 2008 has completed the first 2 years of postsecondary education. This student generally would not be an eligible student for purposes of the Hope credit. taxmap/pub17/p17-184.htm#en_us_publink100035036
Any academic credit awarded solely on the basis of the student's performance on proficiency examinations is disregarded in determining whether the student has completed 2 years of postsecondary education. taxmap/pub17/p17-184.htm#en_us_publink100035037
A student was enrolled at least half-time if the student was taking at least half the normal full-time work load for his or her course of study.
The standard for what is half of the normal full-time work load is determined by each eligible educational institution. However, the standard may not be lower than any of those established by the Department of Education under the Higher Education Act of 1965. taxmap/pub17/p17-184.htm#en_us_publink100035038
Marty graduated from high school in June 2007. In September, he enrolled in an undergraduate degree program at College U, and attended full time for both the 2007 Fall and 2008 Spring semesters. For the 2008 Fall semester, Marty was enrolled less than half-time. Because Marty was enrolled in an undergraduate degree program on at least a half-time basis for at least one academic period that began during 2007 and at least one academic period that began during 2008, he is an eligible student for tax years 2007 and 2008 (including the 2008 Fall semester when he enrolled at College U on less than a half-time basis). taxmap/pub17/p17-184.htm#en_us_publink100035039
After taking classes at College V on a half-time basis for the 2007 Spring and Fall semesters, Sharon became a full-time student for the 2008 Spring semester. College V classified Sharon as a second-semester sophomore for the 2008 Spring semester and as a first-semester junior for the 2008 Fall semester. Because College V did not classify Sharon as having completed the first two years of postsecondary education as of the beginning of 2008, Sharon is an eligible student for tax year 2008. Therefore, the qualified education expenses paid for the 2008 Spring semester and the 2008 Fall semester are taken into account in calculating any Hope credit for 2008. taxmap/pub17/p17-184.htm#en_us_publink100035040
During the 2007 Fall semester, Luis was a high school student who took classes on a half-time basis at College X. Luis was not enrolled as part of a degree program at College X because College X only admits students to a degree program if they have a high school diploma or equivalent. Because Luis was not enrolled in a degree program at College X during 2007, Luis was not an eligible student for tax year 2007. taxmap/pub17/p17-184.htm#en_us_publink100035041
The facts are the same as in Example 3. During the 2008 Spring semester, Luis again attended College X but not as part of a degree program. Luis graduated from high school in June 2008. For the 2008 Fall semester, Luis enrolled as a full-time student in College X as part of a degree program, and College X awarded Luis credit for his prior coursework at College X. Because Luis was enrolled in a degree program at College X for the 2008 Fall term on at least a half-time basis, Luis is an eligible student for all of tax year 2008. Therefore, the qualified education expenses paid for classes taken at College X during both the 2008 Spring semester (during which Luis was not enrolled in a degree program) and the 2008 Fall semester are taken into account in computing any Hope credit. taxmap/pub17/p17-184.htm#en_us_publink100035042
Diana graduated from high school in June 2006. In January 2007, Diana enrolled in a one-year postsecondary certificate program on a full-time basis to obtain a certificate as a travel agent. Diana completed the program in December 2007, and was awarded a certificate. In January 2008, she enrolled in a one-year postsecondary certificate program on a full-time basis to obtain a certificate as a computer programmer. Diana is an eligible student for both tax years 2007 and 2008 because she meets the degree requirement, the work load requirement, and the year of study requirement for those years. taxmap/pub17/p17-184.htm#en_us_publink100035043
The amount of the Hope credit (per eligible student) is the sum of:
- 100% of the first $1,200 ($2,400 if a student in a Midwestern disaster area) of qualified education expenses you paid for the eligible student, and
- 50% of the next $1,200 ($2,400 if a student in a Midwestern disaster area) of qualified education expenses you paid for that student.
The maximum amount of Hope credit you can claim in 2008 is $1,800 ($3,600 if a student in a Midwestern disaster area) times the number of eligible students. You can claim the full $1,800 ($3,600 if a student in a Midwestern disaster area) for each eligible student for whom you paid at least $2,400 ($4,800 if a student in a Midwestern disaster area) of qualified education expenses. However, the credit may be reduced based on your MAGI. See Effect of the Amount of Your Income on the Amount of Your Credit
Jon and Karen Frost are married and file a joint tax return. For 2008, they claim an exemption for their dependent daughter on their tax return. Their MAGI is $70,000. Their daughter is in her sophomore (second) year of studies at the local university. Jon and Karen paid qualified education expenses of $4,300 in 2008.
Jon and Karen, their daughter, and the local university meet all of the requirements for the Hope credit. Jon and Karen can claim a $1,800 Hope credit in 2008. This is 100% of the first $1,200 of qualified education expenses, plus 50% of the next $1,200.taxmap/pub17/p17-184.htm#en_us_publink100035045
To help you figure your Hope credit, you should receive Form 1098-T. Generally, an eligible educational institution (such as a college or university) must send Form 1098-T to each enrolled student by February 2, 2009.taxmap/pub17/p17-184.htm#en_us_publink100035046
You claim the Hope credit by completing Parts I and III of Form 8863 and submitting it with your Form 1040 or 1040A. Enter the credit on Form 1040, line 50, or on Form 1040A, line 31.