IRS 1098-T Educational Tax Credit

Champlain College provides the IRS 1098-T statement by January 31st for the previous tax year for students for preparation of their tax forms.

Hope Scholarship Tax Credit: The Hope Scholarship is not a scholarship but a tax credit.  Each eligible student is qualified for up to $1,800 per year.  An eligible student must be enrolled at least half-time, for at least one academic period beginning in 2008 in an eligible program, leading to a degree or certificate at an eligible school and can not have completed the first two years of undergraduate study.  You may claim the credit yourself if you are not claimed as a dependent by another taxpayer.

Lifetime Learning Tax Credit: A family may claim this tax credit of up to $2,000 ($4,000 for students in Midwestern disaster areas) per tax year for the taxpayer, taxpayer's spouse, or any eligible dependents for an unlimited number of tax years.  The amount of the Lifetime Learning tax credit is 20% of the first $10,000 of qualified educational expenses paid for all eligible students.  Therefore, the maximum amount of a Lifetime Learning tax credit is $2,000.  The Lifetime Learning credit is available for all years of postsecondary education and for a wide variety of educational programs, including non-degree programs.  You may claim the credit yourself if you are not claimed as a dependant by another taxpayer.

1098-T Forms will be mailed by January 31, 2009. Reprints are available on Web Advisor, under "Student Accounts." See "View/Reprint 1098T." Please remember Web Advisor requires student sign-in and password.

Student Loan Interest Deduction

You may be able to deduct interest you pay on a qualified student loan even if you took out the loan before 2007. For further information, please refer to IRS publication 970.

Adjustments to Qualified Expenses

Payments of qualified tuition and related expenses from personal resources (earnings, personal savings, gifts, loans or inheritances) made by the student or by the taxpayer to whom the student is a dependent are taken into account in calculating the credit amount. Payments made with a Pell Grant or other tax-free scholarships, veterans benefits, a tax-free distribution from an Education IRA, or tax-free employer-provided educational assistance do not qualify as payments for purposes of the Hope Scholarship and Lifetime Learning Credits.

Other Information

• Some limitations including certain income limitations apply to both tax credits as well as the Student Loan interest deduction. Please consult the IRS or your tax consultant for further information.
• Helpful Web sites, publications and forms are listed below for you information:

Tax Information Web site: http://www.irs.gov/pub/irs-pdf/p970.pdf (Latest Edition 2007)
Internal Revenue Service Web site: http://www.irs.ustreas.gov
IRS Publication 970 -- Tax Benefits for Higher Education (Latest Edition 2007)
IRS Form 8863 -- Education Credits