Written by Marc R Barnes EA
November 01, 2009
The Hope Credit can help with the cost of higher education for each qualifying student in the first 2 years of college or vocational school.

Do you qualify?

If you or your dependent child plans to attend college, you can claim the Hope Credit if you or they are:
  • Enrolled in 1 of the first 2 years of post-secondary education — generally the freshman and sophomore years of college.
  • Enrolled in a program that leads to a degree, certificate or other recognized educational credential
  • Taking at least half the normal full-time workload for his or her course study during at least one current academic period.
  • Free of felony convictions for the possession or sale of illegal substances at the end of 2008.
  • Didn't claim a Hope Credit in more than 1 previous tax year.
A dependent can claim the Hope Credit only if the person who is eligible to claim the dependent does not claim an exemption for the dependent. The dependent can't claim a personal exemption on his or her return even if the parent doesn't claim it.

You can't claim the Hope Credit if:
  • Your modified adjusted gross income (MAGI) is $58,000 or more ($116,000 or more if Married Filing Jointly).
  • You're Married Filing Separately.

How much Hope Credit can I claim?

As an eligible individual, you may claim the Hope Credit for 100% of the first $2,000 and 25% of the next $2,000 of qualified expenses, which include tuition, and fees and expenses for required books and equipment if the fees and expenses are required to be paid to the educational institution as a condition of enrollment or attendance. Because this is a per-student limit, not a per-return limit, the maximum Hope Credit you can claim for 2009 and 2010 is $2,500 for each eligible student claimed on your tax return. Your credit amount will be reduced if your MAGI is between $48,000 and $58,000 (between $96,000 and $116,000 if Married Filing Jointly).

Hope Credit Tips

  • The Hope Credit is nonrefundable, so if your credit exceeds your tax, the difference isn't refunded to you.
  • The credit can be claimed for eligible expenses you pay for an academic period that begins during the first 3 months of the following tax year. This feature may be especially useful for students whose tuition fees fluctuate from semester to semester.
  • If you and other qualifying individuals are all planning to take classes, the Hope Credit and the Lifetime Learning Credit can be used together. Although you can't claim both credits for the same expenses — or even for the same student — you can claim a Hope Credit for each qualifying student and a Lifetime Learning Credit for a different student's qualifying expenses.
Topic: College