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Overview
The Hope Credit can help with the cost of higher education for each qualifying student in the first 2 years of college or vocational school.

Am I eligible?
 If your dependent child plans to attend college, you can claim the Hope Credit if he or she is:
  • enrolled in 1 of the first 2 years of post-secondary education — generally the freshman and sophomore years of college.
  • enrolled in a program that leads to a degree, certificate or other recognized educational credential
  • taking at least half the normal full-time workload for his or her course study during at least one 2007 academic period.
  • free of felony convictions for the possession or sale of illegal substances at the end of 2007.
  • didn't have expenses that were used to figure a Hope Credit in more than 1 previous tax year.

You can't claim the Hope Credit if:
  • Your modified adjusted gross income (MAGI) is $55,000 or more ($110,000 or more if Married Filing Jointly).
  • You're Married Filing Separately.

To see if you qualify for education credits, use our Education Tax Benefits Estimator.

How much Hope Credit can I claim?
 As an eligible individual, you may claim the Hope Credit for 100% of the first $1,100 and 50% of the next $1,100 of qualified expenses, which include tuition, fees and required books. Because this is a per-student limit, not a per-return limit, the maximum Hope Credit you can claim for 2007 is $1,650 for each eligible student claimed on your tax return. Your credit amount will be reduced if your MAGI is between $47,000 and $57,000 (between $94,000 and $114,000 if Married Filing Jointly).

Hope Credit Tips
  • The Hope Credit is nonrefundable, so if your credit exceeds your tax, the difference isn't refunded to you.
  • The credit can be claimed for eligible expenses you pay for an academic period that begins during the first 3 months of the tax year. This feature may be especially useful for students whose tuition fees fluctuate from semester to semester.
  • If you and other qualifying individuals are all planning to take classes, the Hope Credit and the Lifetime Learning Credit can be used together. Although you can't claim both credits for the same expenses — or even for the same student — you can claim a Hope Credit for each qualifying student and a Lifetime Learning Credit for a different student's qualifying expenses.

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Frequently Asked Questions
Question: How do I know whether to take the Lifetime Learning Credit or Hope Credit?
Answer: The Hope Credit applies only to students who have not completed 2 years of college and only to students who were enrolled on at least a half-time basis. Therefore, if you were not a freshman or sophomore at the beginning of the year or if you are not attending school on at least a half-time basis, you can't claim the Hope Credit. The Lifetime Learning Credit, on the other hand, is available for any level of post-secondary education, including graduate courses. If you're eligible for both credits, choose the one that results in the larger credit. In addition, you can claim the Hope Credit only 2 times. See Form 8863 for more information.

Question: If I took the Hope Credit last year for the first time, can I take it again this year?
Answer: Probably, if you meet the income requirements. If you were still considered a freshman or sophomore at the beginning of the tax year, you can claim the Hope Credit again. But also compute the amount of your Lifetime Learning Credit and claim the larger of the two.

Question: Is post-graduate tuition eligible for the Hope Credit?
Answer: Post-graduate tuition is not eligible for the Hope Credit, but it is eligible for the Lifetime Learning Credit and the Tuition and Fees Deduction.

More Education FAQs
Related IRS Forms & Publications

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