If you have questions regarding 1098-T forms that were sent to you by ECSI, you can call us at 1-888-549-3274 or Login to My Account. Retrieve a Copy of Your Tax Documents
To access this site you will need a Harvard PIN.
If you do not have a PIN or have forgotten the PIN that was assigned to you please visit https://www.pin.harvard.edu/home.shtml for assistance.
If you require additional information or would like to speak with someone regarding your PIN please visit https://www.pin.harvard.edu/help.shtml for contact information.
To retrieve a copy of your tax documents Login to My Account on Harvard's web site.
Overview of Taxpayer Relief Act of 1997
The Taxpayer Relief Act of 1997 (TRA97) introduced several tax incentives on qualifying student loans.
The Hope and Lifetime Learning credits provide the ability to take a tax credit for qualifying educational expense.
The Hope and Lifetime Learning Credits are reported on an IRS Form 1098-T (PDF).
Credits
American Opportunity Credit (1098-T)
Under the American Recovery and Reinvestment Act (ARRA), more parents and students will qualify over the next two years for a tax credit, the American opportunity credit, to pay for college expenses.
The American opportunity credit is not available on the 2008 returns taxpayers are filing during 2009. The new credit modifies the existing Hope credit for tax years 2009 and 2010, making it available to broader range of taxpayers, including
many with higher incomes and those who owe no tax. It also adds required course materials to the list of qualifying expenses and allows the credit to be claimed for four
post-secondary education years instead of two. Many of those eligible will qualify for the maximum annual credit of $2,500 per student.
The full credit is available to individuals whose modified adjusted gross income is $80,000 or less, or $160,000 or less for married couples for filing a joint return.
The credit is phased out for taxpayers with incomes above these levels. These income limits are higher than under the existing Hope and lifetime learning credits. Special rules
apply to a student attending college in a Midwestern disaster area. For tax-year 2009, only, taxpayers can choose to claim either a special expanded Hope credit of up to $3, 600
for the student or the regular American opportunity credit.
Hope Credit (1098-T)
The Hope credit generally applies to 2008 and earlier tax years. It helps parents and students pay for post-secondary education. The Hope credit is a nonrefundable credit.
This means that it can reduce your tax to zero, but if the credit is more than your tax the excess will not be refunded to you. The Hope credit you are allowed may be limited
by the amount of your income and the amount of your tax. The Hope credit is for the payment of the first two years of tuition and related expenses for an eligible student for
whom the taxpayer claims an exemption on the tax return. Normally, you can claim tuition and required enrollment fees paid for your own, as well as your dependents’ college
education. The Hope credit targets the first two years of post-secondary education, and an eligible student must be enrolled at least half time.
Generally, you can claim the Hope credit if all three of the following requirements are met:
- You pay qualified education expenses of higher education.
- You pay the education expenses for an eligible student.
- The eligible student is either yourself, your spouse or a dependent
for whom you claim an exemption on your tax return
You cannot take both an education credit and a deduction for tuition and fees (see Deductions, below) for the same student in the same year.
In some cases, you may do better by claiming the tuition and fees deduction instead of the Hope credit.
Lifetime Learning Credit (1098-T)
The lifetime learning credit helps parents and students pay for post-secondary education. For the tax year, you may be able to claim a lifetime learning credit of up
to $2,000 ($4,000 for students in Midwestern disaster areas) for qualified education expenses paid for all students enrolled in eligible educational institutions. There
is no limit on the number of years the lifetime learning credit can be claimed for each student. However, a taxpayer cannot claim both the Hope or American opportunity
credit and lifetime learning credits for the same student in one year. Thus, the lifetime learning credit may be particularly helpful to graduate students, students who
are only taking one course and those who are not pursuing a degree.
Generally, you can claim the Hope credit if all three of the following requirements are met:
- You pay qualified education expenses of higher education.
- You pay the education expenses for an eligible student.
- The eligible student is either yourself, your spouse or a dependent
for whom you claim an exemption on your tax return
If you’re eligible to claim the lifetime learning credit and are also eligible to claim the Hope or American opportunity credit for the same student in the same year,
you can choose to claim either credit, but not both. If you pay qualified education expenses for more than one student in the same year, you can choose to take credits
on a per-student, per-year basis. This means that, for example, you can claim the Hope or American opportunity credit for one student and the lifetime learning credit
for another student in the same year.
Deductions
Tuition and Fees Deduction (1098-T)
You may be able to deduct qualified education expenses paid during the year for yourself, your spouse or your dependent. You cannot claim this deduction if your filing
status is married filing separately or if another person can claim an exemption for you as a dependent on his or her tax return. The qualified expenses must be for higher
education. The tuition and fees deduction can reduce the amount of your income subject to tax by up to $4,000. This deduction, reported on Form 8917, Tuition and Fees
Deduction, is taken as an adjustment to income. This means you can claim this deduction even if you do not itemize deductions on Schedule A (Form 1040). This deduction
may be beneficial to you if, for example, you cannot take the lifetime learning credit because your income is too high.
You may be able to take one of the education credits for your education expenses instead of a tuition and fees deduction. You can choose the one that will give you
the lower tax. Generally, you can claim the tuition and fees deduction if all three of the following requirements are met:
- You pay qualified education expenses of higher education.
- You pay the education expenses for an eligible student.
- The eligible student is yourself, your spouse, or your dependent for whom you claim an exemption on your tax return.
You cannot claim the tuition and fees deduction if any of the following apply:
- Your filing status is married filing separately.
- Another person can claim an exemption for you as a dependent on his or her tax return. You cannot take the deduction even if the other person does not actually claim that exemption.
- Your modified adjusted gross income (MAGI) is more than $80,000 ($160,000 if filing a joint return).
- You were a nonresident alien for any part of the year and did not elect to be treated as a resident alien for tax purposes.
More information on nonresident aliens can be found in Publication 519, U.S. Tax Guide for Aliens.
- You or anyone else claims an education credit for expenses of the student for whom the qualified education expenses were paid.
Student-activity fees and expenses for course-related books, supplies and equipment are included in qualified education expenses only if the fees and expenses
must be paid to the institution as a condition of enrollment or attendance.
Student Loan Interest Deduction (1098-E)
Generally, personal interest you pay, other than certain mortgage interest, is not deductible on your tax return. However, if your modified adjusted gross income (MAGI) is less
than $70,000 ($145,000 if filing a joint return), there is a special deduction allowed for paying interest on a student loan (also known as an education loan) used for higher
education. Student loan interest is interest you paid during the year on a qualified student loan. It includes both required and voluntary interest payments. For most taxpayers,
MAGI is the adjusted gross income as figured on their federal income tax return before subtracting any deduction for student loan interest. This deduction can reduce the amount of
your income subject to tax by up to $2,500 in 2008. The student loan interest deduction is taken as an adjustment to income. This means you can claim this deduction even if you do
not itemize deductions on Form 1040's Schedule A.
Qualified Student Loan (1098-E)
This is a loan you took out solely to pay qualified education expenses (defined later) that were:
- For you, your spouse, or a person who was your dependent when you took out the loan.
- Paid or incurred within a reasonable period of time before or after you took out the loan.
- For education provided during an academic period for an eligible student.
Loans from the following sources are not qualified student loans:
- A related person.
- A qualified employer plan.
Qualified Education Expenses (1098-T)
For purposes of the student loan interest deduction, these expenses are the total costs of attending an eligible educational institution, including graduate school.
They include amounts paid for the following items:
- Tuition and Fees.
- Books, supplies and equipment.
- Other necessary expenses (such as transportation).
Tax Advice
ECSI can provide replacement forms or information on the method used to compute eligible
interest payments, but we cannot provide tax advice. If you have any questions about if
or how much interest you can deduct, you should consult with a qualified tax professional
or contact the IRS Taxpayer Assistance line at 1-800-829-1040.
The IRS web site has many documents
concerning TRA-97, including some self-help topics for tax filers. See the list of links
below for a more comprehensive list.
Additional Resources
Below are several resources that provide additional information concerning the student
loan interest deduction, and the Taxpayer Relief Act of 1997. These documents or sites are
not maintained by ECSI and we cannot be responsible for their content.
|
