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Lesson 8

Lesson 8. Education Credits. Objectives. Determine who is eligible to claim the credit Determine which credit should be claimed Determine what effect the GOZ Act of 2005 had on these credits. Intake and Interview Process. Form 13614 – Intake and Interview Sheet - Credits Section.

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Lesson 8

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  1. Lesson 8 Education Credits

  2. Objectives • Determine who is eligible to claim the credit • Determine which credit should be claimed • Determine what effect the GOZ Act of 2005 had on these credits

  3. Intake and Interview Process Form 13614 – Intake and Interview Sheet - Credits Section

  4. General Requirements • The taxpayer can not file Married Filing Separate • Have qualified expenses • Have an eligible student • Eligible student must attend eligible institution • Phase Out: • $90,000-$110,000 Married Filing Joint (MFJ) • $45,000-$55,000 Others

  5. Hope Credit • Can be claimed for each eligible student • Maximum is $1,650 credit per student ($3,300 for GOZ Student) • Applies to the first two taxable years of postsecondary education • Calculated in Part I of Form 8863 • Can be claimed on Form 1040A or Form 1040

  6. Lifetime Learning Credit • Based on the total of qualified expenses, not the number of eligible students • The maximum credit is $4,000 (for GOZ Students) or $2,000 per year for regular students • The credit is figured in Part II of Form 8863 • The credit can be claimed on Form 1040A or Form 1040

  7. Quality Review (QR) Form 8158 – Quality Review Checklist Adjustments, Deductions and Credits Section

  8. Lesson Summary • A taxpayer cannot: • Deduct higher education expenses and also claim a Hope or Lifetime Learning Credit based on the same expenses, • Claim a Hope Credit and a Lifetime Learning Credit based on the same qualified education expenses, or • Claim a credit based on expenses paid with tax-free scholarship, grant, or employer-provided educational assistance.

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