Educational Credits

Hope and Lifetime Learning Credits: For 2008, the amount of a Hope or Lifetime Learning Credit is phased out (gradually reduced) for those with a modified adjusted gross income (AGI) between $48,000 and $58,000 ($96,000 and $116,000 for joint returns). Those with a modified AGI of $58,000 or more ($116,000 for joint returns) cannot claim Hope or Lifetime Learning Credits.
Hope Credit: Beginning in 2008, the amount of the Hope credit (per eligible student) is the sum of:
1. 100% of the first $1,200 ($2,400 for students in a Midwestern disaster area) of qualified education expenses paid for the eligible student, and
2. 50% of the next $1,200 ($2,400 for students in a Midwestern disaster area) of qualified education expenses paid for that student.
The maximum amount of Hope credit in 2008 is $1,800 per student ($3,600 for students in Midwestern disaster areas).
Tuition and Fees Tax Deduction: Congress extended this tax benefit until Dec. 31, 2009 as part of the $700 billion economic stimulus package.
Lifetime Learning Credit:
• For 2008, students in a Midwestern disaster are eligible for up to $4,000 - other students are eligible for up to $2,000
• The definition of qualified education expenses is expanded for Students in Midwestern disaster areas to include books, supplies, room and board, and additional expenses for special need students.