Education Tax Credits

Hope Scholarship & Lifetime Learning Credits and Student Loan Interest Deduction

Note: The student's Taxpayer Identification Number (TIN) is required in order for The University of Texas at Austin to properly report educational expenses on the Internal Revenue Service (IRS) Form 1098-T. The TIN may be updated in the secure Tax ID System. The TIN may also be updated by downloading and completing the IRS form W-9S and returning it to Student Accounts Receivable by fax, mail, or in person.

Several tax credits and deductions relating to higher education expenses are available. The following is general information only and should not be taken as tax advice. Please consult the IRS or a tax professional, or see the Resources and Frequently Asked Questions for more information.

The Hope tax credit is available for the first two years of postsecondary education for students enrolled at least half time in a degree or certificate granting program. Taxpayers may claim up to $1,650 per student for qualified tuition and related expenses paid in the calendar year 2008.

The Lifetime Learning tax credit applies to any postsecondary education to acquire or improve job skills. There is no minimum enrollment requirement or limit to the number of years it is available. Taxpayers may claim a maximum of $2,000 of qualified expenses paid in the calendar year 2008.

The Tuition and Fees Deduction can reduce the amount of your income tax by up to $4,000. The deduction is taken as an adjustment to income.

The IRS Form 1098-T is issued to all qualified students with tuition and fee expenses paid in 2008. The form is mailed to the student's permanent address during the last week in January and is also available on the Web.

The Student Loan Deduction is available for taxpayers who have taken loans to pay qualified higher education expenses and paid interest on those loans during the calendar tax year. The deduction may be taken only for interest paid during the first five (5) years in which loan repayments are required. The IRS Form 1098-E is provided for taxpayers who paid more than $600 in interest during the calendar tax year, and is mailed to the borrower's current billing address during the last week in January. If the form does not reach you by Feb. 14, please call 512-475-7779, option 3, for assistance.

Resources
The university cannot provide assistance regarding your eligibility or the calculation of the credit. The following Web sites have additional information that may be useful.
IRS Publication 970 - Tax Benefits for Higher Education
IRS Form 8863 to claim education tax credits
IRS Tax Information for Students

Tax Credit Frequently Asked Questions