Posted: January 19, 1999
Contact: Doug Anderson, email@example.com, 651-201-1426
Over 200,000 students who have attended classes at Minnesota State Colleges and Universities will receive a notice this month that they are eligible for a new federal tax credit.
For students in their first or second year of college, the federal program known as the Hope Scholarship this year will allow families to claim a federal income tax credit of up to $1,500 per year for tuition and fee payments. Students must be enrolled at least half-time to qualify.
"This is the first time that families have received any tax breaks for their higher education bills," said Morris J. Anderson, chancellor of Minnesota State Colleges and Universities. "We hope it will make college more affordable and encourage more students to attend."
MnSCU institutions this week will mail notices to students who are eligible for the tax credit. The notices do not include the amount of tuition a student has paid. That information can be obtained by checking your records or calling the campus where the student attended. To avoid a huge volume of calls, campus officials urge students and parents to obtain the information from tuition receipts or fee statements.
Students who do not qualify for the Hope Scholarship because they are beyond their first two years in college, are not seeking a degree or are attending less than half time can qualify for a Lifetime Learning Scholarship. This program offers a $1,000 federal income tax credit each year through year 2002. In year 2003, the credit rises to $2,000.
There are some income limits to qualify for the new tax credits. The full credit is available to married tax filers with an adjusted gross income of $80,000 or less, and single tax filers with an adjusted gross income of $40,000 or less. Married filers from $80,000 to $100,000 will get partial credit, and single filers from $40,000 to $50,000 will get partial credit.
The exact amount of the new tax credits depends on a family's income, the amount of qualified tuition and fees paid and the amount of certain scholarships and allowances that must be subtracted from tuition.
The tax credits are for academic periods that began on or after Jan. 1, 1998.
A portion of student loan interest also may be deducted from income taxes for the first time this year. The maximum deduction per family is $1,000 in 1998 and $1,500 in 1999.