Are there tax credits available to students and their families?
The HOPE Scholarship Credit establishes a tax credit for higher education: The amount of the credit is 100% of the first $1,000 of qualified tuition and related expenses paid by the taxpayer, and 50% of the the second $1,000 of qualified tuition and related expenses. Scholarships and financial aid do not count as qualified tuition and related expenses paid by the taxpayer. Only out-of-pocket expenses count. Gifts, bequests, and inheritances do count as though paid by the taxpayer. The credit is allowed only for 2 taxable years per student. The student must be enrolled at least half time for at least one academic period that begins during the taxable year. The credit is allowed only for the first two years of postsecondary education. The credit will be denied for a student convicted of a felony drug offense. If the family has multiple students that meet the requirements, then multiple HOPE Scholarship Credits may be claimed. The credit applies to expenses paid after December 31, 1997. T
