The Hope Scholarship Credit is now the American Opportunity Credit
Certain easy scholarships are little understood and we are going to cover one of the easiest scholarships to take avantage of. This simple scholarship credit is guaranteed if you fit the criteria to apply. Many students ask ‘what is the Hope scholarship Credit’? This question gets asked often. We will explain exactly what it was – and is today. Many students and parents of students fret having to pay for college. Between tuition costs and student loans, it can be a heavy burden for anybody to pick up the tab. Fortunately, if you are a resident of the United States or pay taxes in the US, the Hope Scholarship Credit (renamed the American Opportunity Credit as of 2011) will help defray some of the costs associated with attending college, so students and parents should be keenly aware of what this program encompasses and how best to use it in their 2010/2011 tax submissions.
It is important to know, before going any further, that the Hope Scholarship Credit eligibility is available only to those whose income is under $80,000 ($160,000 if married). If interested parties make more than this amount, they are immediately ineligible for applying for the Hope credit. This makes it a very easy scholarship deduction if the income criteria is met (which most student parents will). Further, not all expenses related to education can be claimed in the Hope Scholarship Credit, and only a narrow range of costs can be claimed. However, since the credit’s change to the American Opportunity Credit, the amounts and areas covered have expanded making this a much more useful source for financial assistance at the end of the year. As with all credits when filling out your tax forms, it is of vital importance that those applying for the deduction are truly eligible. Those who are ineligible but claim the credit may have their taxes refused or, if accepted, may find themselves audited by the Internal Revenue Service.
The Hope Scholarship Credit falls under the recent American Recovery and Reinvestments Act which formally changed the title of the credit and the range of items which can be claimed. Interested parties should know that, revamped as the American Opportunity Credit, this deduction can now be claimed by a broader range of applicants. In previous years the Hope Scholarship Credit was only available to those making less than $60,000 dollars a year, and with this income limit now increased to $80,000 a broader range of people may now apply. This easy scholarship credit now is easier to get for many.
Other revamps to the now American Opportunity Credit include increases to the amounts which can be claimed, from previously only allowing the first $1,200 dollars of qualified expenses to now up to $2,500. Also of incredible importance is the range of years under which students may claim the credit. Whereas previously those eligible could only apply for the credit for two consecutive years, it can now be applied for up to four. Further, the program has broadened its list of eligible expenses, making the Hope Scholarship Credit a great source of additional money in the hopes of lowering the individual costs of school for American taxpayers. This may be the easiest scholarship ever in a round about way.
In years past, the Hope Scholarship Credit largely applied only to expenses directly related to the cost of schooling. With its change the American Opportunity Credit, those applying the deduction may now also include expenses which cover the cost of materials related to courses. This means that now books, supplies, and various other materials may now be claimed under the credit. Computer needs required which meet school purposes such as word processing software or database programs may now also be covered under the American Opportunity Credit, allowing students greater flexibility in preparing for their education. The easy scholarship credit got even better!
The information needed to claim your 2010 American Opportunity Credit normally comes from 1098-T forms which are mailed out by college institutions and include qualified expenses. If your institution has not sent these forms out, it may be wise to contact them to inquire when exactly you can expect them.
The Hope Scholarship Credit (American Opportunity Credit) is an important method for lower-income brackets to help make higher education more affordable. While it is not the only method to help defray the costs of education, it offers a decent return for money put into the system. Remember the income eligibility requirements and be sure to only claim that which falls under the program’s criteria. Those who do otherwise may risk getting audited and may end up having to repay the full amount which they wrongly received, adding yet another financial burden where it is least needed.
When it comes to easy scholarships look no further then the new American Opportunity Credit program formally known as the Hope Scholarship Credit program. Make sure you let your accountant know about it because he can do all that’s neccessary to make sure the easiest college scholarship credit is applied when completing your year end taxes.