Tax Incentives for Education

Beginning in 1998, new tax benefits have been added to the tax code in relation to “Qualified Education Expenses”. “Qualified Education Expenses” include tuition and fees, but not books, room and board, transportation or student activity costs.

HOPE Credit: This non-refundable credit can be claimed against federal taxes up to $1,500 per student per year paid for the first 2 years of student’s post-secondary education in a degree or certificate program. You can claim this credit for yourself, your spouse and your dependent under age 24.

Lifetime Learning Credit: Starting 7/1/98, this non-refundable credit can be claimed against federal income taxes equal to 20% of qualified education expenses incurred on behalf of yourself, your spouse or any dependents. These education expenses relate to qualified expenses for undergraduate or graduate-level (and professional degree) courses.


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