An amazing thing happened on the way to the Stimulus Package!   President Obama and Congress have significantly altered and simplified the Hope Credit, which was designed to help low-income families.

            In the tax years 2009 and 2010, the credit has been expanded and now benefits most low-income and middle-class families looking for help with the cost of higher education.

Plan features

1.)    The full credit is available to individuals with an adjusted gross income of less than $80,000, and married couples and families with an adjusted gross income of $160,000.  The credit phases out for individuals and families as income increases.

2.)    The credit is available for the first four years of at least part-time attendance at college.

3.)    100% of the first $2,000 spent on qualified educational expenses, including fees, tuition, and books, is returned to the taxpayer as a dollar-for-dollar reduction in  taxes. In other words, when you pay for the first $2,000 of education, it’s like you are paying $2,000 toward your taxes.

4.)    25% of the next $2,000 spent on qualified educational expenses, including fees, tuition, and books, is returned to the taxpayer as a 25 cents per dollar reduction in  taxes.  Therefore, when you pay for the second $2,000 of education, it’s like you are paying $500 toward your taxes.

5.)    Taxpayers with no tax liability can receive a refund of up to 40%; so even if you don’t pay taxes, you get the money back.

6.)    Qualified institutions include those that the Secretary of Education deems eligible to participate in Title IV Federal Student Aid whether or not the institution actually participates.  Andrew Jackson University has been designated by the Secretary of Education as a Title IV-eligible school; even though we are not participating in FSA, our students ARE eligible to receive these credits.

7.)    Students who use other forms of Federal Aid may not be eligible for the Tax Credit.  Thus, if you are using Federal grant or 529 funds to pay for education, those payments are not eligible for the credit.  However, since Andrew Jackson University does not participate in FSA, most Andrew Jackson University students won’t be “double dipping.”

8.)    As always, interested students should seek tax advice from a qualified tax professional.

How awesome is this??  Through our groundbreaking Sponsored Tuition program, we have cut the cost of attending college to a very low level.   Through this Tax Credit, students who are eligible to receive benefits under the American Opportunity Tax Credit (AOTC) can now bridge the gap and have most of the remainder of their education costs picked up by the U.S. Government.

Andrew Jackson University allows students to Take Education Anywhere and, with this new program, students truly can use their education savings to go anywhere!

Happy studying, and be sure to get your Tax Credit!

Don Kassner