OMB No. 1545-0074 Education Credits

Form 8863

© See instructions to find out if you are eligible to take the credits. Department of the Treasury

Internal Revenue Service

Attachment

Sequence No. 50

Name(s) shown on return Your social security number

Hope Credit. Caution: You cannot take the Hope credit for more than 2 tax years for the same student.

1

2

Lifetime Learning Credit

Part I

Part II

2

(a) Student’s name

(as shown on page 1

of your tax return)

Tentative Hope credit. Add the amounts on line 1, column (f). If you are taking the lifetime learning 

credit for another student, go to Part II; otherwise, go to Part III ©

7

Add the amounts on line 3, column (c), and enter the total

8

8

Enter the smaller of line 4 or $10,000

9

Subtract line 9 from line 8. If zero or less, stop; you cannot take any

education credits

9

11

3

10

10

15

(f) Enter one-half

of the amount in

column (e)

(e) Add 

column (c) and

column (d)

(d) Enter the

smaller of the

amount in

column (c) or

$1,200**

(c) Qualified

expenses (see

instructions). Do

not enter more

than $2,400* for

each student.

Caution:

(a) Student’s name (as shown on page 1 of your tax return)

First name Last name

(c) Qualified

expenses (see

instructions)

For students who attended an eligible educational institution in a Midwestern disaster area, enter

the smaller of $10,000 or their qualified expenses included on line 4 (see special rules on page 3)

4

5a

4

5a

5b

Part III Allowable Education Credits

7 Tentative education credits. Add lines 2 and 6c

Enter: $116,000 if married filing jointly; $58,000 if single, head of household, 

or qualifying widow(er)

Enter the amount from Form 1040, line 38,* or Form 1040A, line 22

If line 10 is equal to or more than line 11, enter the amount from line 7 on line 13 and go to 

line 14. If line 10 is less than line 11, divide line 10 by line 11. Enter the result as a decimal

(rounded to at least three places)

12

13 Multiply line 7 by line 12 ©

15 Enter the total, if any, of your credits from Form 1040, lines 47 through 49, or Form 1040A, lines 29 and 30

13

12 3 .

(Hope and Lifetime Learning Credits)

(b) Student’s

social security

number (as

shown on page 1

of your tax return)

(b) Student’s social security

number (as shown on page

1 of your tax return)

Enter: $20,000 if married filing jointly; $10,000 if single, head of household, 

or qualifying widow(er) 11

© Attach to Form 1040 or Form 1040A.

Last name

First name

(99)

b

* If you are filing Form 2555, 2555-EZ, or 4563, or you are excluding income from Puerto Rico, see Pub. 970 for the amount to enter.

● You cannot take both an education credit and the tuition and fees deduction (see Form 8917) for the same

student for the same year.

Education credits. Enter the smaller of line 13 or line 16 here and on Form 1040, line 50, or Form 

1040A, line 31 ©

17

17

2008

14 Enter the amount from Form 1040, line 46, or Form 1040A, line 28 14

16 Subtract line 15 from line 14. If zero or less, stop; you cannot take any education credits © 16

*For each student who attended an eligible educational institution in a Midwestern disaster area, do not enter more than

$4,800.

**For each student who attended an eligible educational institution in a Midwestern disaster area, enter the smaller of the

amount in column (c) or $2,400.

c Subtract line 5b from line 5a

6a Multiply line 5b by 40% (.40)

b Multiply line 5c by 20% (.20)

c Tentative lifetime learning credit. Add lines 6a and 6b and go to Part III

5c

6a

6b

6c

● You cannot take the Hope credit and the lifetime learning credit for the same student in the same year.
Form 8863 (2008) Page 2

General Instructions

Use Form 8863 to figure and claim your education credits. The

education credits are:

● The Hope credit, and

● The lifetime learning credit.

Who Can Take the Credits

You cannot take the education credits if any of the following

apply.

● Your filing status is married filing separately.

● Your adjusted gross income on Form 1040, line 38, or Form

1040A, line 22, is (a) $116,000 or more if married filing jointly,

or (b) $58,000 or more if single, head of household, or

qualifying widow(er).

● You are claimed as a dependent on another person’s tax

return, such as your parent’s return (but see the Note above).

See Pub. 970, Tax Benefits for Education, for more

information about these credits.

Rules That Apply to Both Credits

Qualified Education Expenses

Generally, qualified education expenses are amounts paid in

2008 for tuition and fees required for the student’s enrollment

or attendance at an eligible educational institution. It does not

matter whether the expenses were paid in cash, by check, by

credit card, or with borrowed funds.

● Course-related books, supplies, equipment, and

nonacademic activities, except for amounts required to be

paid to the institution as a condition of enrollment or

attendance.

● Room and board, insurance, medical expenses (including

student health fees), transportation, or other similar personal,

living, or family expenses.

● Any course or other education involving sports, games, or

hobbies, or any noncredit course, unless such course or other

education is part of the student’s degree program or (for the

lifetime learning credit only) helps the student acquire or

improve job skills.

If you or the student take a deduction for higher education

expenses, such as on Schedule A or Schedule C (Form 1040),

you cannot use those expenses when figuring your education

credits.

Tax-Free Educational Assistance and Refunds of

Qualified Education Expenses

You must reduce the total of your qualified education

expenses by any tax-free educational assistance and by any

refunds of your expenses. If the refund or tax-free assistance

is received in the same year in which the expenses were paid

or in the following year before you file your tax return, reduce

your qualified education expenses by the amount received

and figure your education credits using the reduced amount of

qualified expenses. If the refund or tax-free assistance is

received after you file your return for the year in which the

expenses were paid, you must recapture the excess credit.

You do this by figuring the amount by which your education

credits would have been reduced if the refund or tax-free

assistance had been received in the year for which you

claimed the education credits. Include that amount as an

additional tax for the year the refund or tax-free assistance

was received.

Tax-free educational assistance includes a tax-free

scholarship or Pell grant or tax-free employer-provided

educational assistance. See Pub. 970 for specific information.

You may be able to take the credits if you, your spouse, or a

dependent you claim on your tax return was a student enrolled

at or attending an eligible educational institution. The credits

are based on the amount of qualified education expenses paid

for the student in 2008 for academic periods beginning in

2008 and the first 3 months of 2009.

Note. If a student is claimed as a dependent on another

person’s tax return, only the person who claims the student as

a dependent can claim the credits for the student’s qualified

education expenses. If a student is not claimed as a

dependent on another person’s tax return, only the student

can claim the credits.

Generally, qualified education expenses paid on behalf of

the student by someone other than the student (such as a

relative) are treated as paid by the student. However, qualified

education expenses paid (or treated as paid) by a student who

is claimed as a dependent on your tax return are treated as

paid by you. Therefore, you are treated as having paid

expenses that were paid from your dependent student’s

earnings, gifts, inheritances, savings, etc.

Additional Information

● You (or your spouse) were a nonresident alien for any part

of 2008 and the nonresident alien did not elect to be treated

as a resident alien.

Any qualified expenses used to figure the

education credits cannot be taken into account in

determining the amount of a distribution from a

Coverdell ESA or a qualified tuition program that

is excluded from gross income. See Pub. 970,

chapter 7, for more information.

Qualified education expenses must be reduced by

any expenses paid directly or indirectly using

tax-free educational assistance. See Tax-Free

Educational Assistance and Refunds of Qualified

Education Expenses on this page.

CAUTION

CAUTION

Purpose of Form

You should receive Form 1098-T, Tuition Statement, from

the college or university reporting either payments received in

box 1 or amounts billed in box 2. However, the amounts in

boxes 1 and 2 of Form 1098-T may be different than what you

actually paid. On Form 8863, lines 1 and 3, enter only the

amounts you paid in 2008 for qualified expenses. See

chapters 2 and 3 of Pub. 970.

These credits are based on qualified education expenses

paid to an eligible postsecondary educational institution. See

Qualified Education Expenses and Eligible Educational

Institution, later, for more information.

Example. You paid $8,000 tuition and fees in December

2007, and your child began college in January 2008. You filed

your 2007 tax return on February 2, 2008, and claimed a

lifetime learning credit of $1,600 ($8,000 qualified expenses

paid x .20). After you filed your return, your child dropped two

courses and you received a refund of $1,400.

Qualified education expenses do not include amounts paid

for:

Hope credit increased. For 2008, the maximum amount of

the Hope credit has been increased to $1,800 ($3,600 for

students in Midwestern disaster areas).

What’s New

Students in Midwestern disaster areas. For tax years

beginning in 2008 and 2009, the education credits are

expanded for students attending an eligible educational

institution in a Midwestern disaster area. See Special Rules for

Students in Midwestern Disaster Areas on page 3 and the

specific instructions for Parts I and II.
Form 8863 (2008) Page 3

Specific Instructions

Part I

Hope Credit

Complete columns (a) through (f) on line 1 for each student

who qualifies for and for whom you elect to take the Hope

credit.

Column (c). For each student, enter the amount of qualified

education expenses remaining after reduction by certain

tax-free amounts and refunds, as explained earlier. The

expenses must have been paid for the student in 2008 for

academic periods beginning after 2007 but before April 1,

2009, as explained earlier under Prepaid Expenses. If the

student’s expenses are more than $2,400 ($4,800 if a student

in a Midwestern disaster area), enter $2,400 ($4,800 if a

student in a Midwestern disaster area). You may use the

worksheet that follows to figure the correct amount to enter in

column (c).

Note. If you have more than three students who qualify for the

Hope credit, enter “See attached” next to line 1 and attach a

statement with the required information for each additional

student. Include the amounts from line 1, column (f), for all

students in the total you enter on line 2.

● The student was taking at least one-half the normal full-time

workload for his or her course of study for at least one

academic period beginning in 2008.

● The student has not been convicted of a felony for

possessing or distributing a controlled substance.

If a student does not meet all of the above

conditions, you may be able to take the lifetime

learning credit for part or all of that student’s

qualified education expenses instead.

● The student was enrolled in 2008 in a program that leads to

a degree, certificate, or other recognized educational

credential.

You may be able to take a credit of up to $1,800 ($3,600 if a

student in a Midwestern disaster area) for qualified education

expenses (defined earlier) paid for each student who qualifies

for the Hope credit. The Hope credit equals 100% of the first

$1,200 ($2,400 if a student in a Midwestern disaster area) and

50% of the next $1,200 ($2,400 if a student in a Midwestern

disaster area) of qualified expenses paid for each eligible

student. You can take the Hope credit for a student if all of the

following apply.

● As of the beginning of 2008, the student had not completed

the first 2 years of postsecondary education (generally, the

freshman and sophomore years of college), as determined by

the eligible educational institution. For this purpose, do not

include academic credit awarded solely because of the

student’s performance on proficiency examinations.

● The Hope credit was not claimed for that student’s

expenses in more than one prior tax year.

TIP

Line 1

Qualified Education Expenses Worksheet for Column (c)

(Do a separate worksheet for each student)

1. Total qualified education expenses

2. Less adjustments:

a. Tax-free educational assistance

b. Refunds of qualified education

expenses

c. Other adjustments (see Pub.

970)

3. Total adjustments (add lines 2a–2c)

4. Qualified education expenses (subtract line

3 from line 1). Enter here and on Form

8863, Part I or II, column (c)

The Hope credit for students in Midwestern disaster areas is

100% of the first $2,400 of qualified education expenses and

50% of the next $2,400 of qualified education expenses for a

maximum credit of $3,600 per student. The lifetime learning

credit rate for students in Midwestern disaster areas is 40%.

The definition of qualified education expenses is expanded

for students in Midwestern disaster areas. In addition to tuition

and fees required for enrollment or attendance at an eligible

educational institution, qualified education expenses for

students in Midwestern disaster areas include the following.

1. Books, supplies, and equipment required for enrollment

or attendance at an eligible educational institution.

2. For a special needs student, expenses that are necessary

for that person’s enrollment or attendance at an eligible

educational institution.

3. For a student who is at least a half-time student, the

reasonable costs of room and board, but only to the extent

that the costs are not more than the greater of the following

two amounts.

a. The allowance for room and board, as determined by the

eligible educational institution, that was included in the cost of

attendance (for federal financial aid purposes) for a particular

academic period and living arrangement of the student.

b. The actual amount charged if the student is residing in

housing owned or operated by the eligible educational

institution.

You will need to contact the eligible educational institution

for qualified room and board costs.

Special Rules for Students in Midwestern

Disaster Areas

The following rules apply only to students attending an eligible

educational institution in a Midwestern disaster area in the

states of Arkansas, Illinois, Indiana, Iowa, Missouri, Nebraska,

and Wisconsin. See Table 1 on page 4 for the eligible

counties.

All of the other rules discussed on pages 2 through 4 (as

modified by these rules) must still be met.

Qualified education expenses paid in 2008 for an academic

period that begins in the first 3 months of 2009 can be used

only in figuring your 2008 education credits. For example, if

you pay $2,000 in December 2008 for qualified tuition for the

2009 winter quarter that begins in January 2009, you can use

that $2,000 in figuring your 2008 education credits (if you meet

all the other requirements).

Prepaid Expenses

You must refigure your 2007 lifetime learning credit using

$6,600 ($8,000 qualified expenses - $1,400 refund). The

refigured credit is $1,320. You must include the difference of

$280 ($1,600 credit originally claimed - $1,320 refigured

credit) on your 2008 Form 1040, line 44, or Form 1040A, line

28. Also, enter “$280” and “ECR” on the dotted line next to

line 44 (if filing Form 1040) or line 28 (Form 1040A).

An eligible educational institution is generally any accredited

public, nonprofit, or proprietary (private) college, university,

vocational school, or other postsecondary institution. Also, the

institution must be eligible to participate in a student aid

program administered by the Department of Education.

Virtually all accredited postsecondary institutions meet this

definition.

Eligible Educational Institution

You cannot use any amount paid in 2007 or 2009

to figure your 2008 education credits.

CAUTION
Paperwork Reduction Act Notice. We ask for the information 

on this form to carry out the Internal Revenue laws of the

United States. You are required to give us the information. We

need it to ensure that you are complying with these laws and

to allow us to figure and collect the right amount of tax.

You are not required to provide the information requested

on a form that is subject to the Paperwork Reduction Act

unless the form displays a valid OMB control number. Books

or records relating to a form or its instructions must be

retained as long as their contents may become material in the

administration of any Internal Revenue law. Generally, tax

returns and return information are confidential, as required by

Internal Revenue Code section 6103.

The average time and expenses required to complete and

file this form will vary depending on individual circumstances.

For the estimated averages, see the instructions for your

income tax return.

If you have suggestions for making this form simpler, we

would be happy to hear from you. See the instructions for your

income tax return.

Form 8863 (2008) Page 4

Part II

Lifetime Learning Credit

Line 3

Complete columns (a) through (c) for each student for whom

you are taking the lifetime learning credit.

You cannot take the lifetime learning credit for any

student for whom you are taking the Hope credit

in the same tax year.

The lifetime learning credit equals 20% of qualified expenses

paid, up to a maximum of $10,000 of qualified expenses per

return. Therefore, the maximum lifetime learning credit you

can claim on your return for the year is $2,000, regardless of

the number of students for whom you are claiming the credit.

CAUTION

Column (c). For each student, enter the amount of qualified

education expenses remaining after reduction by certain

tax-free amounts and refunds, as explained earlier. The

expenses must have been paid for the student in 2008 for

academic periods beginning after 2007 but before April 1,

2009, as explained earlier under Prepaid Expenses. You may

use the worksheet on page 3 to figure the correct amount to

enter in column (c).

Note. If you are taking the lifetime learning credit for more

than three students, enter “See attached” next to line 3 and

attach a statement with the required information for each

additional student. Include the amounts from line 3, column

(c), for all students in the total you enter on line 4.

For students in Midwestern disaster areas, this is modified

to 40% of qualified expenses paid, with a maximum lifetime

learning credit allowed on your return of $4,000. If you are

claiming a lifetime learning credit for both students in

Midwestern disaster areas and other students, the qualified

education expenses taken into account in Part II for other

students cannot exceed $10,000 reduced by the qualified

education expenses of students in the Midwestern disaster

areas.

Table 1

The special rules for students in Midwestern disaster areas apply to those attending an eligible educational institution located in the

following counties.

Applicable

Disaster Date*

State Affected Counties —Midwestern Disaster Areas

05/02/2008 Arkansas Arkansas, Benton, Cleburne, Conway, Crittenden, Grant, Lonoke, Mississippi, Phillips, Pulaski, Saline,

and Van Buren.

06/01/2008 Illinois Adams, Calhoun, Clark, Coles, Crawford, Cumberland, Douglas, Edgar, Hancock, Henderson, Jasper,

Jersey, Lake, Lawrence, Mercer, Rock Island, Whiteside, and Winnebago.

06/06/2008 Indiana Adams, Bartholomew, Brown, Clay, Daviess, Dearborn, Decatur, Gibson, Grant, Greene, Hamilton,

Hancock, Hendricks, Henry, Huntington, Jackson, Jefferson, Jennings, Johnson, Knox, Lawrence,

Madison, Marion, Monroe, Morgan, Owen, Parke, Pike, Posey, Putnam, Randolph, Ripley, Rush, Shelby,

Sullivan, Tippecanoe, Vermillion, Vigo, Washington, and Wayne.

05/25/2008 Iowa Adair, Adams, Allamakee, Appanoose, Audubon, Benton, Black Hawk, Boone, Bremer, Buchanan, Butler,

Cass, Cedar, Cerro Gordo, Chickasaw, Clarke, Clayton, Clinton, Crawford, Dallas, Davis, Decatur,

Delaware, Des Moines, Dubuque, Fayette, Floyd, Franklin, Fremont, Greene, Grundy, Guthrie, Hamilton,

Hancock, Hardin, Harrison, Henry, Howard, Humboldt, Iowa, Jackson, Jasper, Johnson, Jones, Keokuk,

Kossuth, Lee, Linn, Louisa, Lucas, Madison, Mahaska, Marion, Marshall, Mills, Mitchell, Monona,

Monroe, Montgomery, Muscatine, Page, Polk, Pottawattamie, Poweshiek, Ringgold, Scott, Story, Tama,

Union, Van Buren, Wapello, Warren, Washington, Webster, Winnebago, Winneshiek, Worth, and Wright.

05/10/2008 Missouri Barry, Jasper, and Newton.

06/01/2008 Missouri Adair, Andrew, Callaway, Cass, Chariton, Clark, Gentry, Greene, Harrison, Holt, Johnson, Lewis, Lincoln,

Linn, Livingston, Macon, Marion, Monroe, Nodaway, Pike, Putnam, Ralls, St. Charles, Stone, Taney,

Vernon, and Webster.

05/22/2008 Nebraska Buffalo, Butler, Colfax, Custer, Dawson, Douglas, Gage, Hamilton, Holt, Jefferson, Kearney, Lancaster,

Platte, Richardson, Sarpy, and Saunders.

06/05/2008 Wisconsin Adams, Calumet, Crawford, Columbia, Dane, Dodge, Fond du Lac, Grant, Green, Green Lake, Iowa,

Jefferson, Juneau, Kenosha, La Crosse, Manitowoc, Marquette, Milwaukee, Monroe, Ozaukee, Racine,

Richland, Rock, Sauk, Sheboygan, Vernon, Walworth, Washington, Waukesha, and Winnebago.

* In some cases, the date will be later due to the continuation of the severe storms, tornadoes, or flooding that began on the above

date. For more details, go to www.fema.gov.