What is the Hope Credit?
The Taxpayer Relief Act of 1997 established the Hope credit, for tuition and related expenses incurred in the first two years of college. Eligible taxpayers can claim a tax credit of as much as $1,500 per student for post-secondary tuition and related expenses (such as lecture fees and the cost of books). The credit can only be claimed for two taxable years, even if the student needs more time to earn a degree. For 2002, the credit is phased out for single taxpayers with modified adjusted gross income between $41,000 and $51,000. The credit is phased out for joint filers with modified AGI between $82,000 and $102,000. In 2003, the single taxpayer phaseouts are unchanged; the phaseouts for joint filers, however, rise to $83,000 and $103,000. You can t take the Hope credit for a student in the same year that you take the lifetime learning credit for that student or that the student withdraws tax-free funds from an Education IRA. For more information see IRS Publication 970, Tax Benefits
