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Tax Breaks for Higher Education

You and your parents may reduce out-of-pocket expenses for your education by taking advantage of the Hope and Lifetime Learning Tax Credits , the Tuition and Fees Deduction, and Student Loan Interest Deduction. All can save you and your parents considerable money!

Although this page is updated for the 2008 tax year, it is not intended to be all inclusive regarding education tax benefits. You can also go directly to the IRS web site to keep informed on your own.

Note that CFAR does not provide tax advice and the contents of this page are for informational purposes only. Do not rely on these brief summaries to determine your individual tax situation -- refer to the appropriate IRS publication/form identified below and/or speak with your tax advisor.

Tax Credits: Hope and Lifetime Learning Tax Credits

The 2008 Tax Code allows for tax credits of up to $1800 per eligible student for the Hope and up to $2000 per eligible tax return for the Lifetime Learning Credit. In general, the Hope is applicable only for the first two years of post-secondary education (freshman and sophomore years) and the Lifetime Learning Credit may be applicable for all years of post-secondary education and beyond.

In late January /early February UNH Business Services sends students Form 1098-T (Tuition Payments Statement). The reverse side of this statement identifies educational charges billed during the tax year that may be applied towards either the Hope or Lifetime Learning Credits. These tax credits may be claimed when you or your parents file your federal tax returns.

To determine your or your parents' eligibility for these credits and how to claim them and other updates, refer to IRS Publication 970 (Tax Benefits for Higher Education) and IRS Form 8863 (Education Credits).

For more information refer to the UNH Business Services' web page regarding tuition tax credits.

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Tax and Loan Deductions, Loan Consolidation and Loan Calculators:

• Deduction For Higher Education Expenses

  The 2008 Tax Code allows for deducting up to $4000 in qualified tuition and fee expenses, even if you/your parents do not itemize deductions on your/their returns. Both deduction and Hope/Lifetime Learning Tax Credits can not be claimed for same student in same year. To determine your or your parents' eligibility and other requirements related to this claiming deduction, refer to Publication 970.

• Student Loan Deduction

  The 2008 Tax Code allows for deducting up to $2500 in interest paid on a qualified student loans in 2008. To determine your eligibility for this deduction and how to claim it, refer to IRS Publication 970.

• Loan Consolidation and Loan Calculators

  Check out FinAid for information about loan consolidation and access to loan calculators.

   

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