For tax year 2006, taxpayers will be eligible for a tax credit equal to 100% of the first $1,100 of qualified tuition and related expenses and 50% of the next $1,100 will be taken into account for the Hope Scholarship Credit.  The Hope Scholarship Credit is for students in the first two years of college (or other eligible post-secondary training), and with respect to any individual enrolled on at least a half-time basis for any portion of the year.  The credit will be available on a per-student basis for net tuition and fees (less grant aid) paid for college enrollment.  The credit can be claimed in

two taxable years, but not beyond the year when the student completes the first two years of college.  For 2006, the modified adjusted gross income in excess of $55,000 (single) or $110,000 (married filing jointly) is taken into account in determining the reduction of the amount of Hope & Lifetime Learning Credit.

The Lifetime Learning Credit is for those beyond the first two years of college, or taking classes part-time to improve or upgrade their job skills, the family will receive a 20% tax credit for first $10,000 of tuition and fees. The credit is available for net tuition and fees (less grant aid) paid for post-secondary enrollment. The credit is available on a per-taxpayer (family) basis, and is phased out at the same income levels as the HOPE Scholarship Credit.

For more information about tax credits for higher education, review the IRS Publication 970.

 

 

$200 More Hope Credit for 2006