Last Updated : January 14, 2009
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8863

Form 8863

Education Credit (Hope and Lifetime Learning Credits)

Purpose of Form
Use form 8863 to figure & claim your education credits. The education credits are..

  1. The Hope Credit, and
  2. The Lifetime Learning Credit.

These credits are based on qualified education expenses paid to an eligible postsecondary educational institution.

Who Can Take the Credits?
Taxpayer may be able to take the credits if:

  1. taxpayer,
  2. taxpayer’s spouse, or
  3. taxpayer’s dependent claimed on his tax return

was a student enrolled at or attending an eligible educational institution. The credits are based on the amount of qualified education expenses paid for the student in 2006 for academic periods in 2006 and the first 3 months of 2007.

Taxpayer cannot take the education credits if any of the following apply…

  1. Taxpayer is claimed as a dependent on another person’s tax return, such as taxpayer’s parent’s return.
  2. Taxpayer’s filing status is Married filling separately.
  3. Taxpayer’s adjusted gross income (AGI) on Form 1040, line 38, or Form 1040A, line 22, is
  4. $110,000 or more if married filing jointly, or
  5. $ 55,000 or more if single, head of household (HOH), or qualifying widow(er)
  6. Taxpayer (or his spouse) was a nonresident alien for any part of 2006 and the nonresident alien did not elect to be treated as a resident alien.

Taxpayer cannot claim both the Hope and Lifetime Learning Credits for the same student in the same year.  To qualify for either credit, Taxpayer must pay post-secondary tuition and fees for taxpayer himself, taxpayer’s spouse or taxpayer’s dependent. The credit may be claimed by the parent or the student, but not by both. Students who are claimed as a dependent cannot claim the credit.

 

Part 1: Hope Credit
The taxpayer is able to take maximum credit up to $1650 ($3300 if a GO Zone student) for qualified education expenses.

The Hope Credit is 100% of the first $1100 ($2200 if GO Zone student) & 50% of the next $1100 ($2200 if GO Zone student) of qualified expenses paid for eligible student.

Note: Taxpayer cannot take the Hope Credit for more than 2 tax years for the same student.

Line 1:
You are not required to enter the student name and SSN number on this line. it flows from Main Information Worksheet. Enter the qualified expenses in “column c” but should not be greater than $2200.

 

Part 2: Lifetime Learning Credit
The Maximum lifetime learning credit is $4000 for GO Zone students & $2000 for all other students, regardless of the number of students. If you are claiming a lifetime learning credit for both GO Zone students and other students, the qualified education expenses taken into account in part 2 for other students cannot exceed $10,000 reduced by the qualified education expenses of the GO Zone students.

If you qualify, your credit equals 20% of the first $10,000 of post-secondary tuition and fees you pay during the year, for a maximum credit of $2,000 per tax return ($4000 for GO Zone students).

Part 3: Allowable Education Credit

Line 8:
Line 8 is the limit of Adjusted Gross Income for taxpayer. Program will enter this limit automatically on the basis of information entered on Main information worksheet.

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