College Education Deduction
Maximum Deduction Amount
$3,000 "above the line" deduction for college expenses paid for you, your spouse or anyone claimed as a dependent on your return. No deduction is allowed for expenses of any person who can be claimed as a dependent on someone else's return. So your dependent college-age child can't claim the deduction when your own AGI is too high to qualify. The $3,000 annual limit applies no matter how many students are in your family.
Qualified Use
College tuition and fees.
AGI Limits
$65,000 (single); $130,000 (married filing jointly); deduction not available for those who are married but file separately.
Other Restrictions
No deduction can be claimed for expenses paid with tax-free withdrawals of earnings from a College 529 Plan or Coverdell ESA. No deduction is allowed for years when the Hope Scholarship or Lifetime Learning Credit is claimed for the student in question.
Hope Scholarship Credit
Maximum Credit Amount
$1,500: 100% of the first $1,000 of a college student's tuition and fees plus 50% of the next $1,000. Credit is taken per student, not per return.
Qualified Use
Expenses relating to the first or second year of college only. Expenses include tuition and fees, such as course-related books, supplies and equipment. Cannot be used for room and board costs.
AGI Limits
For 2003, credit is phased out for singles with AGIs between $41,000 to $51,000; married filing jointly, $83,000 to $103,000. Credit is not available for those who are married but file separately.
Other Restrictions
Can only be claimed for two years per student. Student must be enrolled at least half the time time for at least one academic period during the year. Cannot be used during same year you claim Lifetime Learning Credit for a particular student.
Lifetime Learning Credit
Maximum Credit Amount
For 2003, 20% of qualifying tuition and fees up to $10,000 for a maximum credit of $2,000 annually. Only one credit is allowed per return, even if your family has several students.
Qualified Use
20% of qualifying tuition and fees, such as course-related books, supplies and equipment. Expenses for graduate work are allowed. Cannot be used for room and board costs.
AGI Limits
For 2003, credit is phased out for singles with AGIs between $41,000 to $51,000; married filing jointly, $83,000 to $103,000. Credit is not available for those who are married but file separately.
Other Restrictions
Cannot be used during same year you claim Hope Scholarship Credit for a particular student. Unlike the Hope Scholarship Credit, there are no degree or workload requirements for eligibility.
Student Loan Interest Deduction
Maximum Deduction Amount
$2,500
Qualified Use
Qualified education loans for you, your spouse or anyone you claim as a dependent. Loans can include those that have been refinanced or consolidated.
AGI Limits
Deduction is phased out for singles with AGIs of $50,000 to $65,000; married couples filing jointly, $100,000 to $130,000. Deduction is not available for those who are married but file separately.
Other Restrictions
No deduction is allowed if you are claimed as a dependent on someone else's tax return. Loans cannot include educational expenses covered by a Coverdell ESA or an employer educational assistance program.
