Tax Incentives
The Taxpayers Relief Act has made several tax incentives available to families.
- Hope Scholarship provides a maximum tuition tax credit of $1,500 per student for the first two years of college. Families with joint incomes below $100,000 (single filers below $50,000) are eligible.
- Lifetime Learning Tax Credit allows a $1,000 tuition tax credit. It is available to college juniors, seniors, and graduate students. Families with joint incomes below $100,000 (single filers below $50,000) are eligible.
- Tuition Deduction is a tuition tax deduction for qualified higher education expenses available for taxpayers with adjusted gross income of up to $65,000 for single filers and $130,000 for married taxpayers filing jointly. The maximum deduction in tax years 2002 and 2003 is $3,000.
- Interest on Student Loans. Taxpayers with joint income below $130,000 (single filers below $65,000) may deduct up to $2,500 in annual interest paid on education loans.
- Coverdell Education Savings Account (formerly education IRA). The current contribution limit is $2,000 per year for qualified educational expenses. Qualified educational expenses that may be paid tax-free from this account include both higher education expenses and elementary/secondary expenses, including expenses for the purchase of computer technology, equipment, and internet access under certain circumstances.
Tax Tips
- Consult a tax advisor to determine your eligibility for tax incentives.
- Columbia College Chicago will issue an annual 1098-T to assist with reporting the Hope Scholarship and Lifetime Learning tax credits on your tax return. Call 877.467.3821 or visit www.1098T.com for more information.
- Scholarships and grants that exceed the cost of tuition, fees, books, and supplies are considered taxable income to the student by the IRS. It is the student?s responsibility to maintain records in order to determine potential tax liability.
- Federal Work-Study earnings received during in-school sessions are not subject to FICA withholding but are subject to federal and state income taxes. You will be issued a W-2 by January 31st.
Additional Information