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TEL:202 205 8748
OVAE
U.S. Department of Education
Office of Vocational & Adult Education .
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OSFAP - Tuition Tax Credits
Tuition Tax Credits
The Hope and Lifetime Learning Tax Credits
If you're paying for your or your dependent's college education, there are two tax credits
aVailable for you-the Hope and the Lifetime Learni~g credits.
Whatts a Tax Credit?
A tax credit is better than a deduction. A credit is subtracted directly from your federal
income tax on a dollar-for-dollar basis. This saves you more money than a deduction. which
you subtract from your income before you calculate your tax and which yields much less
than dollar-for-dollar savings.
Who Gets to Claim the Credit?
If someone claims the student as a dependent for tax purposes, that person, not the
student, may receive the tax credit, even if the student files a taxretum. Otherwise, only the
student may receive'the credit.
.
What's the Differe'nce BetwE:!en the Credits?
The Hope credit can be claimed for each of the first two years of college or vocational
school. for classesthatlead to a degree or recognized certificate. The student must be
enrolled at least half"time to qualify for the Hope credit. The Lifetime Learning credit is
available for any postsecondary education. including graduate and ,professional school. and
unlike the Hope credit, there is no minimum enrollment. If you qualify for both credits, it will
usually be to your advantage to claim the Hope credit.
What College Costs Qualify?
Qualified expenses include tuition and required fees, minus any grants and scholarships
that are received tax-free. Expenses for books and supplies are not included unless they
are paid to the institution as a condition of enrollment. The costs of room and board,
insurance, transportation, and medical fees (including health fees) are not qualified
expenses, even if required for enrollment.
What the Hope'Tax Credit is Worth:
The amount of the credit equals 100% of the first $1,0.00 of qualified expenses plus 50% of
the second $1.000, for. a maximum of $1,§OQ. After the year 200'2, the credit will be
adjusted according to inflation.
Example: You are single., enrolled in the first year at a technical school. and have an
adjusted gross income of $20,0.0.0.. You pay $2.200 in tuition and required fees and receive
an $800 tax-free grant, which brings your e~penses to $1,400. You would be eligible for a
Hope tax credit of $1,200. (100% ofthe first $1,000 plus 50% of $400, or $200=$1.200).
http://www .ed.gov/officesiOSFAPIStudents/taxcuts/credits.html
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I
What the Lifetime Learning Tax Credit is Worth:
Through the year 2002, The credit equals 20% of the first $5,000 of qualified expenses, for
a maximum of $1,000. After 2002, the credit will be 20% of the first $10,000. for a maximum
of $2,000. Unlike the Hope credtt, this will not be adjusted for inflation.
Example: You and your spouse file jointly and have an adjusted gross income of
$70,000. Your child is enrolled in the third year at a university, which costs you $4,000 in
qualified expenses. You would receive a Lifetime Learning credit of $800 (20% of $4,000).
Is There an Income Limit?
Single tax filers with up to $40,000 of adjusted gross income (AGI) and joint tax filers with
up to $80,000 of AGI qualify for the full credit. It is gradually phased out for single filers in
the $40,000-$50,000 range and for joint filers in the $80,000-$100,000 range, and it is not
available for those whose income exceeds the upper limit of those ranges. '
How the Phaseout is Calculated:
If you are a single filer with an adjusted gross inc'ome between $40,000 and $50,000, or 13
joint filer in the $80,000-$100,000 range, the credit is reduced by the percentage of the
phase-out range your income exceeds.
'
Example: You are a single filer who has an AGI of $45,000, or a joint filer with an AGI of
$90,000. In both cases, your tax credit would be reduced by 50%, since your income
exceeds 50% of the phase-outrange.
It's Easy to Claim the Credit!
• The college will send the student IRS Form 1098-T. Tuition Payments Statement,
which will report the tuition and related expenses paid for the student.
• The person claiming the credit needs to fill out IRS.Form 8863 (PDF) arid attach the
form to his or her federal tax return. You can call 1·800-829-3676 toorderthe form. It
is a worksheet.that will help to calculate the amount of the Hope or Lifetime Learning
. credit that will be claimed on the return.
Other Points to Remember--
• Married couples must file a joint tax return in order to be eligible for either credit.
• Only one credit may be claimed per student per year.
• A student who has been convicted of a felony drug offense is not eligible for the Hope
credit.
'
• A student who has' benefitted from a tax free distribution from an Education IRA is not
eligible for either tax credit.
• A family with more than one student may qualify for more than one credit in a year. A
Hope credit may be claimed for each student who qualifies. However, the Lifetime
Learning credit is claimed on a per taxpayer (family) basis. That means that the
Lifetime Learning credit may be claimed only once per year by a taxpayer, although it
may cover more than one student in a family as long as the maximum vallie of the
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OSFAP . Tuition Tax CTedits
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credit is not 'exceeded. ,
Example: You and your spouse have three children, all dependents, enrolled in
college. The two younger ones are in their first two years, so each qualifies for a Hope
tax credit. The oldest child is a senior whose expenses are $3,000. Also, you are
taking classes at a graduate school and must pay $4,000, You and your spouse may
claim only one Lifetime Learning credit for your family. This will cover the first $5,000
of the $7,000 you pay for your and your oldest child's education, and will reduce your
federal income tax by $1,000 (20% of $5,000). That is in addition to the amount you
will save with the two Hope credits you receive for your younger children.
For More Information
Call the IRS Help Line at 1-800-829-1040; read IRS publication 970, Tax Benefits for
HigherEducation (192K PDF, Portable Document Format, requires the Adobe Acrobat
Reader. To download this for free, go to the 8.Grctbat Reader download site); visit the U.S.
Treasury Department's Web site at www.irs.ustreas.go~; or consult your tax advisor.
Page last modified: November 9, 1999 bjs'
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http://www.ed.gov/offices/OSFAP/Students/taxcuts/credits.html
11123/99
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Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Ruby Shamir - Subject Series
Creator
An entity primarily responsible for making the resource
First Lady's Office
Ruby Shamir
Is Part Of
A related resource in which the described resource is physically or logically included.
<a href="http://clinton.presidentiallibraries.us/items/show/36351" target="_blank">Collection Finding Aid</a>
<a href="http://catalog.archives.gov/id/7763277" target="_blank">National Archives Catalog Description</a>
Identifier
An unambiguous reference to the resource within a given context
2012-0565-S
Description
An account of the resource
Ruby Shamir held the position of Policy Advisor and Assistant to the Chief of Staff in the First Lady’s Office. Previously, she served as Assistant Director for Domestic Policy in the Domestic Policy Council. This series of Subject Files contains materials relating to domestic policy topics, especially on children’s issues such as health, education, child care and youth violence. The records include memorandum, faxes, letters, reports, schedules, and publications.
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Publisher
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Clinton Presidential Library & Museum
Format
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Adobe Acrobat Document
Extent
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236 folders in 15 boxes
Date
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1999-2001
Text
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Original Format
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Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
A name given to the resource
Education/Lifelong Learning
Creator
An entity primarily responsible for making the resource
First Lady's Office
Ruby Shamir
Subject Files
Identifier
An unambiguous reference to the resource within a given context
2012-0565-S
Is Part Of
A related resource in which the described resource is physically or logically included.
Box 6
<a href="http://www.clintonlibrary.gov/assets/Documents/Finding-Aids/Systematic/2012-0565-S-Shamir.pdf" target="_blank">Collection Finding Aid</a>
<a href="http://catalog.archives.gov/id/7763277" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
Format
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Adobe Acrobat Document
Publisher
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Clinton Presidential Library & Museum
Medium
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Reproduction-Reference
Date Created
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7/22/2013
Source
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2012-0565-S-education-lifelong-learning
7763277