Form 8863 - Education Credits (Hope And Lifetime Learning Credits) - 1998 Page 2
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Form 8863 (1998)
Page
General Instructions
unless such course or other
or other postsecondary institution.
education is part of the student’s
The institution must be eligible to
Purpose of Form
degree program or (for the lifetime
participate in a student aid program
learning credit only) helps the
administered by the Department of
Use Form 8863 to figure and claim
student to acquire or improve job
Education. Virtually all accredited
your education credits. The
skills.
postsecondary institutions meet this
education credits are:
requirement.
If you or the student claim a
The Hope credit, and
deduction for higher education
Hope Credit
The lifetime learning credit.
expenses, such as on Schedule A or
You may be able to claim a credit of
Schedule C (Form 1040), you
Who May Claim the Credits
up to $1,500 for qualified expenses
cannot use those expenses when
You may be able to claim education
(defined earlier) paid for each
figuring your education credits. Also,
credits for qualified expenses paid in
student who qualifies for the Hope
higher education expenses paid with
1998 for a student enrolled at or
credit. The expenses must have
a tax-free scholarship, Pell grant, or
attending an eligible educational
been paid in 1998 for academic
employer-provided educational
institution.
periods starting after December 31,
assistance cannot be used when
1997, and before April 1, 1999. You
You cannot claim the education
figuring your education credits.
can claim the Hope credit only for a
credits if:
Caution: If a student received a
student who:
1. Your filing status is married
tax-free distribution from an
Had not completed the first 2
filing separately,
education IRA for 1998, none of that
years of postsecondary education
student’s expenses may be used to
2. You are claimed as a
(generally, the freshman and
figure any 1998 education credits.
dependent on another person’s tax
sophomore years of college) as of
However, the student may elect to
return, such as your parent’s return
December 31, 1997,
be taxed on the distribution. See
(but see the TIP under What
Form 8606, Nondeductible IRAs, for
Is enrolled in a program that leads
Expenses Qualify? below), or
details.
to a degree, certificate, or other
3. Your adjusted gross income
recognized educational credential,
Expenses paid by a
(from Form 1040, line 34, or Form
student whom you claim
Is taking at least one-half the
1040A, line 19) is:
as your dependent are
normal full-time workload for his or
$100,000 or more if married filing
treated as having been
her course of study for at least one
jointly, or
paid by you. Therefore, you can use
academic period beginning in 1998,
$50,000 or more if single, head of
expenses paid with the dependent
and
household, or qualifying widow(er).
student’s earnings, loans, gifts,
Has not been convicted of a
inheritances, or personal savings in
See Pub. 970, Tax Benefits for
felony for possessing or distributing
figuring your education credits. A
Higher Education, for more details
a controlled substance.
student who is claimed as a
about these credits and other tax
If a student does not meet all of
dependent on your return cannot
benefits for people who paid higher
the above qualifications, you may be
claim education credits on his or her
education costs.
able to take the lifetime learning
retur n.
credit for part or all of that student’s
Rules That Apply to Both
Prepaid Expenses
qualified expenses instead.
Credits
If you paid qualified expenses in
Note: The Hope credit may be
What Expenses Qualify?
1998 for an academic period that
claimed for no more than 2 tax years
Generally, qualified expenses are
begins in the first 3 months of 1999,
for each student.
you can use the prepaid amount in
amounts you paid for tuition and
Lifetime Learning Credit
fees required for enrollment or
figuring your 1998 credit. For
example, if you pay $2,000 in
attendance at an eligible educational
The maximum lifetime learning credit
institution for you, your spouse, or a
December 1998 for qualified tuition
is $1,000 per year, regardless of the
for the 1999 winter quarter that
dependent you claim on your tax
number of students. Only qualified
return. Amounts you paid include
begins in January 1999, you can use
expenses paid after June 30, 1998,
that $2,000 in figuring your 1998
amounts charged to your credit
and before January 1, 1999, for
card.
credit.
academic periods beginning after
June 30, 1998, and before April 1,
Qualified expenses do not include
Caution: You cannot use any
1999, can be used to figure the
amount paid in 1997 or 1999 to
amounts paid for:
lifetime learning credit.
figure your 1998 education credits.
Room and board, insurance,
Exception. For the lifetime learning
transportation, or other similar
What Is an Eligible Educational
credit, you may not use qualified
personal, living, or family expenses.
Institution?
expenses of any student for whom
Books or equipment (except as
An eligible educational institution
you elect to take the Hope credit.
provided in regulations).
is generally any accredited public,
Any course or other education
nonprofit, or proprietary (private)
involving sports, games, or hobbies,
college, university, vocational school,
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