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Tax Credits

For Higher Education

The sole responsibility of Alaska Pacific University regarding the Hope Scholarship and Lifetime Learning tax credits is to furnish Form 1098-T to students incurring tuition and related expenses. It is not responsible for, and is prohibited by law, from giving tax advice. Taxpayers should contact their tax advisor or the Internal Revenue Service for guidance.

Hope Scholarship

The Hope Scholarship is a tax credit (reduces the amount of income tax you may have to pay) available to taxpayers for the first two years of postsecondary education. After all tax-free educational assistance and refunds are subtracted, it allows taxpayers to claim a maximum of $1,650 per student per return.

Each student claimed must be pursuing an undergraduate degree, certificate, or other recognized education credential, and enrolled at least half time for at least one academic period beginning during the year. Students must also be free of any federal or state felony conviction for possessing or distributing a controlled substance as of the end of the tax year.

The Hope credit is gradually reduced for individuals whose modified gross income (MAGI) is between $47,000 and $57,000 ($94,000 and $114,000 if a joint return is filed). It cannot be claimed for individuals whose MAGI is $57,000 or more ($114,000 or more if a joint return is filed). It cannot reduce tax liability to less than zero. For complete information on the Hope Scholarship see IRS Publication 970 (PDF), Tax Benefits for Education.

Lifetime Learning Credit

The Lifetime Learning Credit is a tax credit (reduces the amount of income tax you may have to pay) available to taxpayers for each year of post-secondary education and for courses taken to acquire or improve job skills. After all tax-free educational assistance and refunds are subtracted, it allows taxpayers to claim up to $2,000 of remaining qualified education expenses per return, regardless of the number of post-secondary students in the family.

Students are not required to be pursuing a degree or other recognized education credential. And the felony drug rule conviction does not apply.

The Lifetime Learning Credit is gradually reduced for individuals whose modified gross income (MAGI) is between $47,000 and $57,000 ($94,000 and $114,000 if a joint return is filed). It cannot be claimed for individuals whose MAGI is $57,000 or more ($114,000 or more if a joint return is filed). It cannot reduce tax liability to less than zero.

For complete information on the Lifetime Learning Credit see IRS Publication 970 (PDF), Tax Benefits for Education.

IRS Form 1098-T (Tuition Payments Statement)

IRS Form 1098-T is a tuition payments statement that will assist taxpayers in calculating any education tax credit that they may be eligible for under the Hope Scholarship and Lifetime Learning tax credits. If eligible, this form will be used to complete IRS Form 8863, which attaches to the taxpayers return.

The 1098-T contains the filer’s Alaska Pacific University address, Federal Tax ID number and contact information, along with the student’s name, address, social security number, and enrollment status. More importantly, the 1098-T contains the qualified tuition and related expenses billed to the student by the University during the calendar year. It also displays the amount of any scholarships or grants received by the student during the calendar year.

Qualified tuition and related expenses are defined by the IRS as “tuition and fees required for enrollment or attendance.” In general, not all charges incurred during a calendar year will meet IRS requirements–which is why the figure in Box 2 will probably not match total charges for the calendar year. University charges that the IRS considers non-qualified are listed in the table below, along with contact numbers for questions about the amounts listed on the 1098-T.

1098-T FAQS

Why did I receive this form?

As an eligible educational institution, the University is required by law to provide Form 1098-T to students who were enrolled in courses at the University during the calendar year. It is used in calculating any education tax credit that you may be eligible for under the Hope Scholarship and the Lifetime Learning Credit.

Why doesn’t the form show the payments I made during the calendar year?

The Internal Revenue Service requires each eligible educational institution to report payments received (Box 1) or amounts billed (Box 2) for qualified educational expenses. The majority of colleges and universities elect to report amounts billed for qualified educational expenses.

What should I do with this form?

If you are listed as a dependent on another taxpayer’s return, your 1098-T should be given to the taxpayer. If no one else claims you as a dependent, you should give the form to your tax preparer.

How much can I claim on my taxes?

The University cannot provide tax advice. Whether you are able to take advantage of these tax credits depends upon your individual status and circumstances–which are known only to you. Contact the Internal Revenue Service at 1-800-829-1040 for guidance.

Should I attach the IRS Form 1098-T to my tax return when I mail it?

No. The information provided on your IRS 1098-T form is used to complete IRS Form 8863. Form 8863 is attached to your tax return.

I never received a 1098-T. How do I get one?

To get a copy of your current 1098-T Information, you must contact Student Financial Services at 907-564-8341, unless you belong to one or more of the following groups: students who didn’t incur any charges during the calendar year, took only non-credit courses, or were non-resident aliens for the calendar year. 1098-Ts were not issued for those students.

What information did the University send to the IRS?

Beginning in 2003, eligible educational institutions are required to provide the IRS with the same information that is reported on your 1098-T.