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Home | TCRS | Policy Watch | The Hope Scholarship Credit

The Hope Credit

The Hope Scholarship Credit is for students who are enrolled in one of the first two years of post-secondary education and are carrying at least a half-time workload while pursuing an undergraduate degree, certificate, or other recognized credential.

The Hope Scholarship Credit is available to eligible taxpayers on a per-student basis for the first two years of post-secondary education. You are eligible if you have qualified expenses paid in the corresponding tax year as a student enrolled at or attending an eligible educational institution. You cannot claim credits if your filing status is married and filing separately or you are claimed as a dependent on another person's tax return (such as your parents’ return). The full amount of the Hope Scholarship Credit is available to married taxpayers filing jointly with an adjusted gross income (AGI) of $107,000 or less and to single taxpayers with an AGI of $53,000 or less. Married taxpayers with a combined AGI of $107,000 or greater (and single taxpayers with an AGI of $53,000 or greater) are ineligible for this credit.

The amount that may be claimed as a credit is generally equal to: (1) 100 percent of the first $1,000 of the taxpayer’s out-of-pocket expenses for each student’s qualified tuition and related expenses; plus (2) 50 percent of the next $1,000 of the taxpayer’s out-of-pocket expenses for each student’s qualified tuition and related expenses. Thus, the maximum credit a taxpayer may claim for a taxable year is $1,500 multiplied by the number of students in the family who meet the eligibility requirements described above. Qualified tuition and related expenses are tuition and fees a student must pay to be enrolled at or attend an eligible educational institution.

The following are not qualified tuition and related expenses: (1) amounts paid for any course or other education involving sports, games or hobbies (unless the course or other education is part of the student's degree program); (2) charges and fees for room, board, student activities, athletics, insurance, books, equipment, transportation (and similar personal, living or family expenses). Please refer to the "Definitions" under "TRA ’97 Information" portion of the www.tcrs.com Web site to verify that your expenses qualify. If you or the student claim a deduction for higher education expenses, such as on Schedule A or Schedule C (Form 1040), you cannot use those expenses when figuring your education credits. Also, higher education expenses paid with a tax-free scholarship, Pell Grant or employer-provided educational assistance cannot be used when figuring your education credits. Eligible expenses for this credit are offset by scholarships, grants, and other tax-free tuition benefits. Nonresident aliens generally are ineligible to claim the Hope Scholarship Credit.

The Hope Scholarship Credit is nonrefundable. If the taxpayer is claiming a Lifetime Learning Credit for a particular student, none of that student’s expenses for that year may be applied toward the Hope Scholarship Credit.

For more information about the Hope Scholarship Credit, call the IRS at 1-800-TAX-1040 or visit their web site at www.irs.gov.