Do limitations apply to the Hope Scholarship and Lifetime Learning Tax credit?
YES, limitations do apply to both the Hope Scholarship and Lifetime Learning tax credits: The Hope and Lifetime credits cannot both be claimed for the same student in the same tax year. The taxpayer may claim both credits on one tax return (for different students) but must choose which credit to claim for each individual. These credits may not be combined with tax-free withdrawals from education IRAs. Scholarships, grants, and other tax-free tuition benefits offset eligible education expenses. The full value of both credits is available to married taxpayers filing jointly with an adjusted gross income (AGI) of $80,000 or less and to single taxpayers with an adjusted gross income (AGI) of $40,000 or less. The tax credits phases out gradually. Once married taxpayers’ AGI exceeds $100,000 or single taxpayers’ AGI exceeds $50,000, they are not eligible for these credits. The income limits will be adjusted for inflation after 2001. A student who is claimed as a dependent on another taxpayer
