Gerald Kramer
The AZ CPA
4531 N 16th St
Suite 126
Phoenix, AZ 85016
(602) 264-9331
Fax: (602) 279-1766
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Hope & Lifetime Credits Detailed
Final regulations have been issued in December 2002 for the HOPE and LIFETIME learning credits which came into effect in 1999.
Eligible expenses mean tuition and fees required to attend an eligible post secondary education institution by the taxpayer, spouse or dependents. Student activity, fees, books, supplies and equipment for courses must be paid directly to the institution. Room and board, insurance, medical expenses, transportation, etc. do not qualify.
Those items not covered by the credits, may be paid with tax-free distributions from education IRA's. Qualified expenses must also be reduced by scholarship amounts that have been excluded from income.
Remember, the HOPE credit is a maximum of $ 1,500 per eligible student, per year, for a maximum of 2 years, relating to the 1st two years of post-secondary education.
The lifetime learning credit is a maximum of $ 1,000 for the year 2002, going up to $ 2,000 for years starting in the year 2003. This is a maximum per return.
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