Tax Credit Information

The Taxpayer Relief Act of 1997 provides taxpayers two new non-refundable tax credits
for payments made for qualified tuition and related expenses (tuition and fees, but not
books) for post-secondary education -- the HOPE Scholarship Credit and the Lifetime
Learning Credit.

The HOPE Scholarship Credit allows taxpayers to claim a maximum credit of $1,500.00
(100 percent of the first $1,000 of tuition and fees and 50 percent of the next $1,000 of
tuition and fees) for expenses paid on behalf of the taxpayer, the taxpayer's spouse, or a
dependent for the first two years of post-secondary education at an eligible institution.
The student must be enrolled on at least a half-time basis for at least one academic period
during the year for the expenses to be qualified.  The HOPE Scholarship Credit applies to
expenses paid for education furnished in academic periods during the qualified period.

The Lifetime Learning Credit allows taxpayers to claim a maximum credit equal to 20
percent of up to $5,000 of expenses ($10,000 beginning in 2003) incurred during the
taxable year for qualified tuition and fees for eligible students for post-secondary
education, including any course of instruction to acquire or improve job skills.

Both credits limit qualified expenses to the expenses of the taxpayer, the taxpayer's
spouse, or a dependent of the taxpayer.  Additionally, both credits are phased out for
taxpayers with modified AGI between $40,000 and $50,000 (between $80,000 and
$100,000 for joint filers).  For each qualifying student, taxpayers must choose to claim
either the HOPE Scholarship Credit, the Lifetime Learning Credit, or the exclusion for
certain distributions from an education IRA for the taxable year.

It is up to the taxpayer or his or her tax advisor to determine if the amounts paid will make
the taxpayer eligible to claim one or more credits in any tax year.  This includes payments
made at all schools attended by all eligible family members.  It is very important that
taxpayers obtain information from a qualified tax advisor.  There may be some
circumstances that could affect an individual's eligibility to claim an educational tax credit.

The U.S. Department of Education at http://www.ed.gov/inits/HOPE/

Internal Revenue Service at http://www.irs.gov/publications/p970/index.html or 1-800-829-1040