Tax Education Credits
December 16th, 2010
Question: I have questions about the Lifetime Learning and Hope education tax credits?
Do you have to owe taxes in order to claim these credits? Do you have to make a certain amount of income for the year?
I made a small amount of money because I only worked part time for about two months. I also have a small child for which I claimed EIC, which i know is affected by income. When I try to calculate my taxes using turbotax or taxcut, it shows a very small refund under $200.
My school costs about $13,000. I got around $5000 in federal grants and the rest was in student loans. After, I still owed the school $950 which I borrowed from another lender.
Do any of these amounts or methods qualify me to claim the education credits? If not, what other credits can I claim related to education?
I chose not to pay interest while in school on my loans. Am I eligible to claim the interest that has accrued so far?
Answer: The education credits are only useful if you owe tax in the same year you pay tuition. Your income is too low to owe tax, so they are of no benefit.
You can’t claim interest you haven’t paid yet, but when you do start paying it, it will be a possible deduction.
Tax cut highlights
_ Extends, for two years, lower rates for taxpayers at every income level, lower taxes on capital gains and dividends, marriage penalty relief, more generous child tax credits and education tax credits. Cost: $408 billion.
Rep. Ryan on Higher Education Tax Credits
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