Tax Relief Act of 1997
1098t Tax Forms
In January, the Student Accounting Department will issue a 1098t Tax Form to eligible students. Students may also access a copy of their forms through the "Tax Notification" option under the "Student Accounts" menu in eServices.
Educational institutions have the choice to report either the amount billed or the amount paid on the 1098t forms. VCU reports the amount billed. Students may select the "Account Detail for Term" option in eServices to view their account information which may assist them in determining the amount of the credit which may be claimed on their behalf.
The Tax Relief Act of 1997 may provide you an opportunity for tax savings through the Hope Scholarship Credit and Lifetime Learning Tax Credit. These two tax credits are based on payments made for tuition and certain related educational costs.
Hope Scholarship Credit
- Applies to the first two years of postsecondary education;
- applies to students enrolled at least half time in a degree seeking or certificate program for at least one semester during the year and to students who have never been convicted of a state or federal felony offence consisting of the possession or distribution of a controlled substance;
- can equal 100% of the first $1,000 and 50% of second $1,000 of qualified costs; total credit is $1,500 per student;
- qualified costs will be tuition and possibly a portion of student fees, but the law specifically excludes books, room and board, insurance, activity and athletic fees and other expenses unrelated to the student's academic course of study;
- the qualified costs will be reduced by certain financial aid awards including Pell, SEOG, institutional waivers and scholarships;
- only the student or the taxpayer who claims the student as an exemption on their tax return can claim the credit, married taxpayers must file jointly to be eligible for the credit;
- the proceeds of student and parent loans credited to the student's account are considered payments by the taxpayer;
- the amount a taxpayer may claim as a Hope Scholarship Credit is gradually reduced for taxpayers with modified adjusted gross income between $40,000 and $50,000 (between $80,000 and $100,000 for married taxpayers filing jointly);
- only terms beginning after 12/31/97 and payments made after 12/31/97 can be counted for the credit.
Lifetime Learning Credit
- An individual paying qualified tuition and related expenses at a postsecondary educational institution may claim the credit, provided the institution is an eligible educational institution. Unlike the Hope Scholarship Credit, students are not required to be enrolled at least half time in one of the first two years of postsecondary education. Nonresident aliens generally are not eligible to claim the Lifetime Learning Credit;
- can equal 20% of the first $5,000 of qualified costs per taxpayer family per calendar year through the year 2002 and thereafter, 20% of the first $10,000 of qualified costs per taxpayer family per calendar year;
- qualified costs will be tuition and possibly a portion of student fees, but the law specifically excludes books, room and board, insurance, activity and athletic fees and other expenses unrelated to the student's academic course of study;
- the qualified costs will be reduced by certain financial aid awards including Pell, SEOG, institutional waivers and scholarships and possibly private scholarships;
- only the student or the taxpayer who claims the student as an exemption on his or her tax return can claim the credit; married taxpayers must file jointly to be eligible for the credit;
- the proceeds of student and parent loans flowing through the student's account are considered payments by the taxpayer;
- the amount a taxpayer may claim as a Lifetime Learning Credit is gradually reduced for taxpayers with modified adjusted gross income between $40,000 and $50,000 (between $80,000 and $100,000 for married taxpayers filing jointly);
- only payments made on or after 07/01/98 can be counted for the credit.
More Information
If you have further questions concerning either tax credit, you may want to consult with a tax professional to discuss your personal situation.
