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Hope Credit for Students in Midwestern Disaster Areas

For tax years 2008 and 2009 only, the Hope Credit for a student living in a Midwestern disaster area was expanded. This special credit is available to students attending an eligible educational institution in a Midwestern disaster area in these states:

  • Arkansas
  • Illinois
  • Indiana
  • Iowa
  • Missouri
  • Nebraska
  • Wisconsin

To learn of the eligible counties, see Publication 4492-B: Information for Affected Taxpayers in the Midwestern Disaster Areas, page 2.

These applied to the Hope Credit for students in Midwestern disaster areas:

  • The credit was 100% of the first $2,400 of qualified education expenses and 50% of the next $2,400 of these expenses. A maximum credit of $3,600 per student was allowed.
  • You could claim a Hope Credit if both of these applied:
    • At least 1 eligible student attended an eligible educational institution in Midwestern disaster area
    • You didn't claim American Opportunity Credit for any other student in the same year
  • Your Hope Credit was gradually reduced for tax years 2008 and 2009 if your modified adjusted gross income (AGI) was:
    • Between $50,000 and $60,000
    • Between $100,000 and $120,000 if married filing jointly
  • You couldn't claim a Hope Credit if your modified AGI was $60,000 or more ($120,000 or more if married filing jointly).
  • The maximum Lifetime Learning Credit for students in Midwestern disaster areas was $4,000 per return. There were no increases for the American Opportunity Credit claimed for students in Midwestern disaster areas.

Students in Midwestern Disaster Areas

Qualified education expenses for students at an eligible educational institution in Midwestern disaster areas included:

  • Tuition and fees required for enrollment or attendance
  • Books, supplies, and equipment required for enrollment or attendance
  • For a special needs student, expenses necessary for that person's enrollment or attendance
  • For a student who was at least a half-time student, reasonable room and board costs -- but only to the extent that the costs weren't more than the greater of:
    • Room and board allowance included in the attendance cost. The allowance must have been:
      • For federal financial aid purposes
      • For a particular academic period and living arrangement of the student
    • Actual amount charged if the student resided in housing owned or operated by the institution.

To learn more, see:

  • Form 8863 or Form 8917 instructions
  • Publication 970: Tax Benefits for Education
  • Publication 4492-B: Information for Affected Taxpayers in the Midwestern Disaster Areas

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