Tax Relief Act of 1997

Web site for the TRA 1997 information:

http://www.irs.gov/publications/p970/ar01.html

http://www.nasfaa.org/publications/2006/rtaxrevisions112906.html

Hope and Lifelong learning tax credits:

• The College sends IRS Form 1098T to the student's home. This form relates the amount billed for tuition and related fees (not room and board) to the student for the tax/calendar year. It also notes the amount of scholarship awarded to the student.

• The Hope Scholarship Credit is 100% of qualified tuition and expenses, but not more than $1,100.00 plus half of those expenses in excess of $1,100.00, but not more than $2,200.00. The maximum credit allowed is $1,650.00.

• A taxpayer's modified adjusted gross income (MAGI) of more than $47,000 ($94,000 for a joint return) is used to determine reductions of Hope Scholarship and Lifetime Learning Credits.

• The $2,500 maximum deduction for interest paid on qualified education loans begins to phase out for taxpayers with a MAGI of more than $55,000($110,000 for joint returns). Taxpayers with a MAGI of $70,000 or more ($140,000 for joint returns) are not eligible for this deduction.

• The exclusion regarding income from U.S. savings bonds for taxpayers who pay qualified higher education expenses begins to phase out for MAGIs above $98,400 for joint returns ($65,000 for other returns). The exclusion is completely phased out for MAGIs of $128,400 or more for joint returns ($80,600 for other returns).

• IRS Form 1098E is sent to students for loan servicing agencies. This form lists the interest paid for the tax year for educational loans. Although this interest may be deductible, lending institutions are not required to send them out if the interest amount is less than $600.00.

IRS Publication 970 will answer your Hope and Lifetime Learning tax credit questions.

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Dickinson College, PO Box 1773, Carlisle, PA 17013