What are Hope & Lifetime Learning Credits?
A. The 1997 tax act established two distinct new higher education, the Hope Scholarship Credit, and the Lifetime Learning Credit. These are available for qualifying expenses paid (and for courses started) after 12/31/97 and after 6/30/98, respectively. You cannot claim both credits on the same education expenses. Both credits are based on “qualified higher education expenses” which include tuition and course fees, but NOT books, board, meals, transportation or other “fees” assessed by the educational institution. Elective courses (no degree credit) involving sports, games or hobbies do not qualify. Also excluded are tuition and fees paid through employer reimbursement plans, scholarships and fellowships, courses deducted as a business expense, courses paid through a distribution from an Educational IRA, or excluded interest from a series “EE” US Savings Bond. Amounts paid with gifts from private individuals do qualify for the credit. The qualifying expenses must be paid during the tax
