College Tax Benefits

NEW for the 2009 and 2010 Tax Years- The economic stimulus plan signed into law in early 2009 creates another tax benefit for students and parents who paid educational expenses: The American Opportunity Education Tax Credit. Technically a temporary expansion of the Hope credit, the maximum benefit increases to $2500 per year per student. Adjusted gross income limits qualifying for the full credit also have been raised to $160,000 for married couples ($80,000 singles). Above that income level, the credit is gradually phased out with adjusted gross incomes up to $180,000 for couples ($90,000 for singles) eligible for partial credits. For current year benefits, see the Hope Scholarship Tax Credit link below.

Students and parents may qualify for various federal tax benefits based on college expenses. Some of these benefits are credits against tax liability and others are adjustments to income. The information below provides general information about these programs. Consult a tax specialist for specific questions about qualifications.

TAX CREDITS
Hope Scholarship Tax Credit
Lifetime Learning Tax Credit

TAX DEDUCTIONS
Tuition and Fees Tax Deduction
Student Loan Interest Deduction

OTHER INFORMATION
Tax Benefit Coordination
IRS Publication 970
Education Tax Benefits