This page is to provide information to Indiana State University (ISU) students and their parents regarding two higher education related tax credits.

The Hope tax credit is available for students who, at the start of the year, have not completed their second year of post secondary education. The credit provides up to $1,650 (100% of the first $1,100 in qualified tuition and related expenses, and 50% of the next $1,100) of qualified expenses paid for each eligible student. The Hope tax credit is calculated on eligible expenses paid during the 2006 calendar year. To be eligible for the Hope tax credit, the student must be enrolled at least half time for at least one academic period at ISU. There are other provisions and requirements that should be reviewed before claiming the Hope tax credit on your tax return. For your reference, we have provided some helpful links further down on this Web page.

The Lifetime Learning tax credit is a less restrictive tax credit of up to $2,000 (20% of the first $10,000 of qualified tuition and related expenses) per family (the Hope credit is per student.) The Lifetime Learning credit is also calculated on eligible expenses paid during the 2006 calendar year. While the Lifetime Learning tax credit is more broadly applicable to post- secondary education, it is still important to look into the specifics of the credit before claiming it on your tax return.

Further down on this Web page you will find some links that might be helpful in your research.

General Information

In January 2007, you will receive Form 1098-T from ISU for the 2006 tax year. The 1098-T contains data elements that the IRS will find helpful in calculating a student's eligibility for the Hope Scholarship credit and Lifetime Learning Credit. If you have specific questions about what is reported on the form, please refer to the "Instructions for Student" provided with the 1098-T.

Important: Besides the hard copy that is being mailed to you, you can also view and/or print your 1098-T through the MyISU Portal.  Log in with your Sycamore ID and password, click on the "My Banner Self Service Links" under "Self-Service" on the left of the screen, and then click on "Student and Financial Aid", then "Student Records", then "Tax Notification".  When prompted for a tax year, enter "2006".  You will then see your 1098-T form for 2006.

Note: ISU has elected (as allowed by IRS regulations) to report the aggregate amount of qualified tuition and related expenses billed. However, the tax credit is based on the amount of qualified tuition and related expenses actually paid. Please refer to your Account Summary on the MyISU Portal and determine the amount of qualified tuition and related expenses that you actually paid during the calendar year 2006 when computing your credit.

Credit can not be claimed for tuition expenses paid with tax-free funds (scholarships, grants, etc.). Credit can be claimed, however, for tuition expenses paid with loans of any type. In the case where both sources of funds are used to pay both tuition and housing expenses, all tax-free aid is presumed by the IRS to be applied to tuition expenses first. The exception to this rule would be a scholarship or grant specifically designated by the grantor to be used for housing, books or other non-tuition expenses.

You do not need to attach IRS Form 1098-T to your tax return. Keep this Form with your tax documentation for 2006.

Credit must be taken in the year the eligible expenses are incurred.

To claim the credit, you will need to complete and return IRS Form 8863 with your tax return. No other documentation or supporting paperwork is required to be attached to your tax return except Form 8863.

If you are married with a combined modified adjusted gross income of more than $105,000, or single with an adjusted gross income of more than $52,000, then you do not qualify for either tax credit.

Married Taxpayers must file jointly to qualify for either tax credit.

Further information can be obtained at the following links:

If you want to obtain specific information about your ISU Account, any student can be connected to the MyISU Portal. To access the Account Summary Page, you will need your Sycamore ID and password.  Log in with your Sycamore ID and password, click on the "Student" tab at the top, and then click on "View Account / Credit Card Payment".

ISU may not provide tax or legal advice and therefore cannot determine if you qualify for either credit. If you believe that you qualify for the Hope or Lifetime Learning Tax Credits, consult your tax advisor, or contact the IRS at 1-800-829-1040.

If you have any questions after consulting the above information, you may send an e-mail message to kabernathy1@isugw.indstate.edu or alandsaw@isugw.indstate.edu.