These include the Hope Scholarship and Lifetime Learning credits. Taxpayers may claim one, or in some cases, both, of these tax credits. Both of these provisions allow a federal tax credit for tuition and related fees. Room and board and book expenses do not qualify. Tuition and related fees paid by grants, scholarships, and employer-educational assistance are not eligible.
Educational expenses paid with loans are eligible for the tax credits.
However, there are restrictions and limitations on both of these credits. Below is a brief summary on each of these new tax credits. To qualify, a student must attend an eligible higher education institution on at least a half-time basis for one academic period during the year. A taxpayer may claim credits for themselves, spouse, and depe ndents under age 24. Students who have been convicted of a felony for possession or distribution of a controlled substance are ineligible.