Parents can't claim the credit for a student who has been convicted of a felony drug offense the year in which the credit applies. Financial aid and scholarship money may reduce the tax credits a family can claim. Parents who don't pay the student's tuition or list the student as a dependent on their tax returns can't claim the credit. Parents who are taking distributions from an education individual retirement account can't use a Hope credit in the same year. Working adults also can use it for classes to improve their job skills.
Taxpayers can spread the credit over several years.
Working adults who meet the income limits can use the credits to take college courses. Part-time students can also use the credits. Working adults must take classes that they can demonstrate will improve their job skills to claim a credit. Parents must pay the child's tuition and claim the child as a dependent to qualify. Contributions aren't deductible, but withdrawals and investment earnings are tax-free if the money is used for education.