What Is Hope Tax Credit?
The Hope Tax Credit is not a scholarship, nor is it a loan. It is a credit offered by the United States federal government for eligible taxpayers. The credit can play a positive role in your overall federal income tax results.
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Eligibility
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You either paid for your tuition and expenses for the first two years of post-secondary schooling or paid for an eligible student who is your spouse or dependent. The student must be attending school at least halftime.
Disqualifiers
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You cannot file your taxes married but separate, be convicted of a felony drug offense, be someone's dependent, exceed the income specifications, be a non-United States resident or apply for the lifetime credit for the same student the same year.
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Types
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The Hope Credit is a non-refundable credit for eligible undergraduate expenses regardless of age.
The Amount
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You can claim up to $1,800 for the Hope Credit, but up to $3,600 if you attended school in a Midwestern disaster region.
Benefits
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The Hope Tax Credit lowers the amount of income tax you could pay. Since credit is non-refundable, it may lower the tax to zero.
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References
- Photo Credit Gen YKert
