What Was the Hope Credit?

The Hope Credit, or the Hope Scholarship Tax Credit, was a nonrefundable education tax credit offered to eligible American taxpayers. Qualifying students could claim this tax credit for their first two years of postsecondary education.

The Hope and other lifetime learning credits were enacted to encourage higher education and provide a measure of tuition reimbursement for parent𒉰s or students who are pay🥃ing college tuition and fees.

The 澳洲幸运5官方♏开奖结果体彩网:American Opportunity Tax Credit (AOTC) replaced the Hope Credit in tax year 2009.

Understanding the Hope Credit

Before the Hope Credit became part of the American Opportunity Tax Credit (AOTC) in 2009, it was one of two nonrefundable education credits available to taxpayers. (The other credit was the 澳洲幸运5官方开奖结果体彩网:Lifetime Learning Credit, which is still available.)

Recipients could use the Hope Credit for tuition and fees and for certain other expenses, such as books. Room and board, medical expenses, and insurance did not qualify.

As of 2025, the maximum AOTC credit is $2,500. Any individual who incurs qualifying educational expenses can claim the credit. Qualifying educational expenses include tuition and fees. For example, parents who pay tuition and fees for their children can claim this credit on their 澳洲幸运5官方开奖结果体彩网:tax returns, subject to certain income restrictions.

Special Considerations

The Internal Revenue Service (IRS) considers a student qualified if they are enrolled at an accredited postsecondary institution at least part-time. That student must be enrolled at the institution at the beginning of the tax year, taking courses toward a degree or another recognized educational qualification, and must not have been convicted of any felony drug offense by the end of the tax year.

Taxpayers can claim the credit for up to four years of postsecondary education to reduce the costs of tuition and other eligible expenses. According to the IRS, a 澳洲幸运5官方开奖结果体彩网:qualified educational expense includes tuition paid to the school and expenses for books, supplies, and equipment that may have been bought from external sources. These expenses qualify if taxpayers use student loans to pay for them but not if they use scholarships, grants, or funds from a 529 savings plan.

The Bottom Line

The 澳洲幸运5官方开奖结果体彩网:American Recovery and Reinvestment🐽 Act (ARRA) expanded the Hope Credit in 2009, renaming it the American Opportunity Tax Credit. The AOTC made the Hope Credit available to a broader range of taxpayers, expanding eligibility to those with higher incomes and those who owe no tax. The full $2,500 tax credit is available to individuals with a modified adjusted gross income (MAGI) of $80,000 or less ($160,000 or less for joint filers).