Tax credits are financial educational awards that are subtracted from the tax a family owes, rather than reducing taxable income like a tax deduction. These credits are based on several factors including your family’s taxable income. These include:
The Hope Scholarship is actually a tax credit, not a scholarship. Tax credits are subtracted from the tax a family owes, rather than reducing taxable income like a tax deduction.
A family must file a tax return and owe taxes to take advantage of the Hope Scholarship. For additional details on the Hope Scholarship contact your tax advisor or visit the IRS website at http://www.irs.gov/pub/irs-pdf/p970.pdf.
Lifetime Learning Credit
This program is a tax credit available to individuals who file a tax return and owe taxes.
The actual amount of the credit depends on the family s income, the amount of qualified tuition and fees paid, and the amount of certain scholarships and allowances subtracted from tuition. This credit is family-based rather than dependent-based. See your tax advisor for further details or visit the IRS web site at http://www.irs.gov/pub/irs-pdf/p970.pdf.
American Opportunity Credit for College Expenses
The AOTC provides a maximum tax credit of $2,500 for qualified tuition and related expenses for the first four years of post-secondary education. Qualified expenses include tuition, fees, and required textbooks and course supplies not covered by grants, scholarships, or assistance provided by an employer. Learn more.