Federal Perkins & Nursing Loan Counseling

American Opportunity & Lifetime Credit

This page is a resource for The College of St. Scholastica students and their parents who may be eligible for a tax credit under the Taxpayer Relief Act of 1997 (TRA97). TRA97 created two education tax credits for students and families beginning in 1998.  The credits have been modified and extended by The American Recovery and Reinvestment Act (ARRA) & Tax Relief and Job Creation Act of 2010:

  • The American Opportunity Credit provides up to $2,500 per student for qualified tuition and related expenses for the first four years of postsecondary education. To be eligible, students must be enrolled at least half-time in a degree or certificate granting program. The American Opportunity Credit  is available for expenses paid on or after January 1 of the tax year.
  • The Lifetime Learning tax credit is more broadly applicable to any postsecondary education to acquire or improve job skills. It provides a credit equal to 20 percent of qualified expenses of no more than $10,000 per taxpayer (i.e., family).

Eligible higher education institutions will now be required to file information reports with the IRS, and furnish statements to taxpayers (1098-T) on all students for whom they receive tuition payments.

What's New
The American Opportunity Tax Credit modified the existing Hope Credit for tax years 2009 and 2010 under ARRA.  The credit was extended to apply for tax years 2011 and 2012 by the Tax Relief and Job Creation Act of 2010.  The new credit makes the Hope Credit available to a broader range of taxpayers, including many with higher incomes and those who owe no tax.  It also adds required course materials to the list of qualifying expenses and allows the credit to be claimed for four post-secondary education years instead of two.  Many of those eligible will qualify for the maximum annual credit of $2500 per student.  This credit equals 100% of the first $2,000 and 25% of the next $2,000 of qualified expenses paid for each eligible student.  The amount of your credit for 2011 is gradually reduced (phased out) if your Modified Adjusted Gross Income (MAGI) is between $80,000 and $90,000 ($160,000 and $180,000 if you file a joint return).  You cannot claim a credit if you MAGI is $90,000 or more ($180,000or more if you file a joint return).  For additional instructions please go to IRS Publications

The College of St. Scholastica does not provide personal tax advice. To determine your eligibility for a higher education tax credit, please contact the IRS or your personal tax advisor.