The Taxpayer Relief Act Of 1997

1166 Words Aug 1st, 2016 5 Pages
BACKGROUND INFORMATION
The Taxpayer Relief Act of 1997 (TRA97) established two education tax credits: the Hope Tax Credit (currently modified as the American Opportunity Credit by the American Recovery and Reinvestment Act of 2009) for students who are enrolled in one of the first four years of postsecondary education and are carrying at least a half-time workload while pursuing an undergraduate degree, certificate, or other recognized credential; and the Lifetime Learning Tax Credit for students who take one or more classes from a college or university to pursue an undergraduate or graduate degree, certificate, other recognized credential, or to acquire or improve job skills.
The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) established a Higher Education Tuition and Fees Deduction for students who have a modified adjusted gross income that exceeds the defined thresholds for the tax credits.
To claim the American Opportunity (Hope) or Lifetime Learning Tax Credit, use IRS Form 8863, Education Credits. To claim a Higher Education Tuition and Fees
Deduction, use IRS form 8917 but it is not necessary to file an itemized federal income tax return. The deduction is claimed on Line 19 on IRS Form 1040A, or Line 34 on IRS Form 1040. If you are claimed as a dependent by another person [including your parent(s)], you cannot claim the American Opportunity (Hope) Tax Credit,
Lifetime Learning Tax Credit or a Higher Education Tuition and Fees Deduction. However,…
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