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Costs and Financial Aid

Education Tax Credits

The Taxpayer Relief Act of 1997 (TRA-97), passed by the U.S. Congress in August of 1997, provides assistance for students and/or their parents the opportunity for paying or saving for college. The new legislation includes tax credits for college cost and tax-sheltered education savings accounts. KCTCS colleges believe this new legislation offers you and/or your parents an excellent opportunity to save money or assist in paying for some of the costs in achieving your educational goals.

The following two tax credits are available to persons who pay higher education costs.

  • The Hope Scholarship Credit.
  • The lifetime learning credit

The following rules apply to both The HOPE Scholarship and Lifetime Learning Credits.

The amount of each credit is determined by the amount you pay for qualified tuition and related expenses for students and the amount of your modified adjusted gross income. These education credits are subtracted from your tax but they are nonrefundable. This means if the credits are more than your tax, the excess is not refunded to you. If your filing status is Married Filing Separate, you cannot claim the higher education credits.

What expenses qualify?

The credits are based on qualified tuition and related expenses you pay for you, your spouse, or a dependent you claim on your tax return. In general, qualified tuition and related expenses are tuition and fees required for enrollment or attendance at an Eligible Educational Institution. Fees for course-related books, supplies and equipment, and student activity fees are included in qualified tuition and related expenses only if the fees must be paid to the KCTCS college as a condition of enrollment or attendance. Qualified tuition and related expenses do not include the cost of insurance, medical expenses (including student health fees), room and board, transportation or similar personal, living or family expenses, even if the fee must be paid to the institution as a condition of enrollment or attendance. If you pay for qualified tuition and related expenses for an academic period that begins in the first three months of the following year, you can use the prepaid amount in figuring your credit.

Eligible Educational Institution.

KCTCS colleges are eligible accredited educational institutions and do participate in Federal Student Financial Aid program administered by the Department of Education.

Additional details on the HOPE Scholarship and Lifetime Learning Credits.