Hope and Lifetime Learning Credits FAQWhat is the Hope Credit?
Undergraduate students in their first two years of post-secondary education who are enrolled at least half-time may be eligible for an income tax credit of up to 100 percent of the first $1,100 and 50 percent of the next $1,100 paid for tuition and expenses paid for those years (for a maximum credit of $1,650). If you may be claimed as a dependent, then the person providing your financial support may be eligible to claim the credit. What is the Lifetime Learning Credit?
All part-time students, full-time junior and senior undergraduate students, and graduate students may be eligible for an income tax credit. The credit will equal 20 percent of the first $10,000 of qualified tuition and related expenses paid (for a maximum credit of $2,000). If you may be claimed as a dependent, then the person providing your financial support may be eligible to claim the credit. Is it possible to qualify for both the Hope and Lifetime Learning Credits and if so, may I choose which one I would like to claim?
Yes, a student may qualify for both the Hope and Lifetime Learning Credits at the same time, but you may only claim one or the other. In general, students who qualify for both the Hope and Lifetime Learning Credits may find the Hope Credit to be more beneficial. However, any decision of whether an individual qualifies for either credit, or which credit may be more beneficial is based on each individual's tax situation. May an individual claim a Hope or Lifetime Learning Tax Credit for more than one family member?
The Hope Credit is calculated on a per-student basis, while the Lifetime Learning Credit is calculated on a per-family basis. Therefore, it would be possible for each student in the family to qualify for the $1,650 Hope Credit. It is also possible for more than one family member to qualify for the Lifetime Learning Credit, however, since the Lifetime Learning credit is calculated on a per-family basis, it will be capped at $2,000. How do I determine which expenses will qualify for the Hope and Lifetime Learning Credits?
Generally, only "qualified tuition and related expenses" are eligible. The term "qualified tuition and related expenses" is defined by the IRS and means the amounts billed for tuition and expenses required to be paid by an individual in order to be enrolled at or attend an eligible institution. At the University of Puget Sound this includes tuition, course fees, lab fees and student government fees. The IRS has excluded books, room and board from eligible expenses. Amounts paid with respect to sports, hobbies or games (such as physical education fees) will not generally be considered eligible, unless they are a part of a student's degree program. Your Hope and Lifetime Learning credits are based on the amount of eligible expenses billed as defined above. Loan proceeds and student employment (including Federal Work -study) applied to a student's account are considered to be payments made by you. At the University of Puget Sound, all Puget Sound scholarships and grants awarded by the University are included in the gift aid total which reduces the amount of eligible tuition expenses. What is Form 1098-T (Tuition Statement)?
By February 1, Form 1098-T (Tuition Statement) will be sent to each University of Puget Sound student billed for qualified tuition and related expenses during the period of January 1 through December 31. Why did I receive Form 1098-T?
Form 1098-T has been provided to assist in determining if you, or the person who may claim you as a dependent, are eligible to claim an income tax credit on an income tax return. If I receive Form 1098-T, does that mean that I qualify for the Hope or Lifetime Learning Credits?
No. The University is required to provide Form 1098-T to individuals for whom qualified tuition and related expenses were billed during the calendar year. Eligibility to claim either the Hope or Lifetime Learning Credits is based on each individual's tax situation. If tuition was paid by a government subsidized loan, can I still take the Hope or Lifetime Learning Credit?
If you take out a loan to pay higher education expenses, those expenses may qualify for the credit if you will be required to pay back the loan. The credit is claimed in the year in which the expenses are paid, not in the year in which the loan is repaid. If I am a nonresident alien, will I receive a Form 1098-T?
Though a nonresident alien may receive Form 1098-T, a non-resident alien is not generally eligible to claim either the Hope or Lifetime Learning Credit. Certain nonresident aliens who are married to U.S. citizens or permanent resident aliens and who qualify to file a joint-income tax return, may, in some cases, qualify to claim the credits. Also, foreign students from Barbados, Hungary, and Jamaica, who qualify for and elect to be treated as resident aliens for U.S. tax purposes by virtue of an income tax treaty, may be eligible to claim the credits. What if the information reported on Form 1098-T is incorrect or you need a replacement form?
If the Form 1098-T is incorrect, please send us an e-mail or contact our office at 253.879.3214 and a revised or replacement form will be prepared. Where can I get more information?
The University of Puget Sound cannot provide you with any tax advice or assistance in determining whether you are eligible to claim the credit or how to claim the credit if eligible. To determine whether you, or the person who may claim you as a dependent, is eligible to claim either the Hope Credit or the Lifetime Learning Credit, please contact a tax professional or refer to the IRS Publication 970 (Tax Benefits for Higher Education) or IRS Form 8863. You may contact the IRS at 800.829.1040 or www.irs.ustreas.gov. | 
