The Taxpayer Relief Act of 1997 passed a number of reforms to the current tax code. Importantly, this act creates additional opportunities for a postsecondary education by making two new tax credits available for students, taxpayers, and families. The Hope Scholarship and the Lifetime Learning Credit are tax credits that may be claimed for out-of-pocket tuition and allowable expenses paid for a postsecondary education. In order to determine eligibility for these new tax credits, postsecondary institutions are required to send student enrollment and summary financial data to the Internal Revenue Service (IRS). Additionally, institutions must provide students a copy of this data by sending a 1098-T form to all students involved in the IRS reporting process.
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The Hope Scholarship is a tax credit designed to help make the first two years of college or vocational school affordable. Students may claim up to 100 percent of the first $1,000 of tuition and required fees and a 50 percent credit on the second $1,000, for a maximum possible tax credit of $1,500. This credit may be claimed for any paid tuition and required fees minus grants, scholarships, or other tax-free educational assistance and will be available for payments made after December 31, 1997 for college enrollment after that date. Beginning in 2005, the amount of your Hope credit is gradually reduced (phased out) if your modified adjusted gross income (MAGI) is between $43,000 and $53,000 for single tax filers, and between $87,000 and $107,000 for joint tax filers. The credit may be claimed for any student enrolled in their first two years of college or vocational school and enrolled at least half-time in a degree or certificate program for any portion of the year. The taxpayer can claim a credit for either his or her own tuition expense or for the expense of his or her spouse or dependent children. Both the Lifetime Learning Credit and the Hope Scholarship can be claimed by one family if separate members of the family are eligible for each credit within one year.
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The Lifetime Learning Credit may be claimed by college juniors, seniors, graduate and professional degree students, and students enrolled at a vocational school. Students or parents may claim a 20 percent tax credit for the first $5,000 of tuition and required fees paid each year through 2002, and for the first $10,000 thereafter. The Lifetime Learning Credit can be claimed for tuition and required fees minus any grants, scholarships, or other tax-free educational assistance. The maximum credit is determined on a per-taxpayer (family) basis, regardless of the number of postsecondary students in the family. Beginning in 2005, the amount of your Lifetime Learning credit is gradually reduced (phased out) if your modified adjusted gross income (MAGI) is between $43,000 and $53,000 for single tax filers, and between $87,000 and $107,000 for joint tax filers. Both the Lifetime Learning Credit and the Hope Scholarship can be claimed by one family if separate members of the family are eligible for each credit within one year.
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The 1098-T form contains data elements that the IRS uses to calculate a student's eligibility for the Hope Scholarship and the Lifetime Learning Credit. The 1098-T contains a combination of student personal data, such as name, address, and SSN; and institutionally-provided enrollment data, such as graduate or undergraduate status, and enrollment status as well as summary financial data. The IRS will use this data to help determine who is eligible for the educational tax credits.
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The Hope Scholarship and Lifetime Learning education tax credits are designed to help students and families cope with the cost of a college education. Publication 970, Tax Benefits for Education, is a federal guide to preparing tax returns for Hope and Lifetime Learning credits and other education-related tax benefits. The IRS Home Page is an excellent source for general tax information and filing forms. The entire text of the Taxpayer Relief Act is found at this link as a .pdf file. The irs.com site is an extensive source of tax forms and information. The Families' Guide to the 1997 Tax Credits for Education discusses eligibility for the Hope and Lifetime Learning credits. The U.S. Department of Education site and the Federal Student Aid site offer help with applying for college and finding sources of funding for higher education. The Financial Aid Information site has further information on financial assistance.
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This site is designed to assist students, taxpayers, and institutions in the reporting of data required by the Taxpayer Relief Act of 1997. The Taxpayer Relief Act of 1997 makes two new tax credits available for postsecondary education and this site is designed to assist students, families, and institutions in working with the information the Internal Revenue Service (IRS) requires to calculate these credits.
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If you're a student, parent, or taxpayer, return to the Home Page and click the Student Services button. To log in to the database, you will need to enter your school's OPE ID code, your Social Security Number, Name ID, and PIN. If your school has chosen to provide the information to you, the OPE ID and PIN can be found on your 1098-T form.

If you're a school working with the student data your institution is reporting to the IRS, return to the Home Page and click the School Services button to log in using your assigned User ID and Password.

Enrollment in this web site is optional for institutions, so it is possible your school has not signed up for this service. If that is the case, you will not be able to log in to the database, but we invite you to read through the FAQs and to use the links on this site to gain additional information on the Taxpayer Relief Act, Hope Scholarship Credit, Lifetime Learning Credit, and how Pearson Government Solutions Taxpayer Relief Act Services can assist you with IRS reporting requirements and 1098-T mailing responsibilities.
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The IRS Home Page is an excellent source for tax information, forms, and advice.

If you wish to see the entire text of the Taxpayer Relief Act, follow the link to this page found on our Links Page and choose IRS Publication 970.

Visit the IRS Hope Scholarship Credit Page to get answers to frequently asked questions about the Hope Scholarship Credit. The page is on the IRS website.

Visit the IRS Lifetime Learning Credit Page to get answers to frequently asked questions about the Lifetime Learning Credit. The page is on the IRS website.

The Hope Scholarship Credit and Lifetime Learning Credit are designed to help students and families cope with the cost of a college education. For further information on other forms of assistance for a postsecondary education, follow the Financial Aid Information link.

TaxWeb is an extensive reference for both state and federal tax regulations.

The Families' Guide to the 1997 Tax Credits for Education is located on the Department of Education website and it discusses the eligibility and reporting requirements for the Hope Scholarship Credit and Lifetime Learning Credit.
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Qualified expenses are tuition and fees that are required for enrollment at an eligible educational institution. Expenses that do not qualify are books, room and board, student activities (unless mandatory for enrollment), athletics (unless required as part of degree program), insurance, equipment, transportation, or other similar expenses.
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An eligible educational institution generally includes any accredited public, nonprofit, or proprietary postsecondary institution eligible to participate in the student aid programs administered by the U.S. Department of Education.
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