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Tax education credits:
The tax season's gift to parents and students

Tax education credits are available to people who pay for eligible higher education expenses. So, even if you don't go to college but are paying for somebody who does, you can claim this credit when you file for your tax return. Your tax professional should be able to help you figure out if you can claim this tax credit and how much tax refund you will get. However, here are a few differences that you should be aware of:

Hope Credit Lifetime Learning Credit
Up to $1,650 per eligible student Up to $2,000 credit per return
Available ONLY until the first 2 years of postsecondary education are completed Available for all years of postsecondary education and for courses to acquire or improve job skills
Available ONLY for 2 years per eligible student Available for an unlimited number of years
Student must be pursuing and undergraduate degree or other recognized educational credential Student does not need to be pursuing a degree or other recognized education credential
Student must be enrolled at least half time for at least one academic period beginning during the year Available for one or more courses
No felony drug conviction on student's record Felony drug conviction rule does not apply

This table appears in the 2007 IRS Publication 17 which is the federal tax guide for individuals. The IRS updates and makes this publication available to the public every year. It is a useful tool if you want to claim additional tax credits besides the Tax education credits or just want to be more informed regarding taxes in general. There is also a chart that appears on page 227 of this publication so that you can determine if you are eligible to claim Tax education credits either for yourself or your dependent. Download the 2007 IRS publication by clicking here.

To download the publication right click on the 'Download the 2007 IRS publication by clicking here' and from the menu select 'save as. This download requires Adobe reader. There are many eligibility guidelines with regards to these credits so make sure you ask your tax professional all the necessary questions regarding this matter. Not doing so may be costly because:

  • you may have to pay back any tax refund you receive if the IRS determines that you are not entitled to it or

  • you may get less money than you are entitled to. For instance, you may get more money when you claim the Hope Credit during the first 2 years of postsecondary education compared to the Lifetime Learning Credit.

Take advantage of these Tax education credits as much as possible. You already pay the federal government enough taxes so why not get something back? :)

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