Glossary of Terms
- American Opportunity Tax Credit
- The American Opportunity Tax credit is a partially refundable tax credit
that is part of the American Recovery and Reinvestment Act of 2009 (ARRA)
passed by Congress. This new credit modifies the existing Hope Credit for tax
years 2009 and 2010 and is worth up to $2,500 of the cost of tuition and related
expenses. The full credit is available to individuals whose modified adjusted
gross income is $80,000 or less, or $160,000 or less for married couples filing
a joint return. The credit is phased out for taxpayers with incomes above these
levels. For more information, see Publication 970, Tax Benefits for Education.
- Education Credits
- Refers to IRS Form 8863. See definition below.
- Eligible Dependent
- An eligible dependent is a person for whom you claim a dependency
exemption. It generally includes your unmarried child who is under age 19 or
who is a full-time student under age 24 if you supply more than half the child's
support for the year.
- Eligible Educational
- An eligible educational institution generally includes any
accredited public, nonprofit, or proprietary postsecondary institution
eligible to participate in the student aid programs administered by the
Department of Education. The University of Hawai‘i is an eligible educational
- Eligible Student
- You, your spouse, or an eligible dependent can be an eligible student. The
student must be enrolled at an eligible educational institution for at least
one academic period (semester, trimester, quarter) during the year.
- Form 1098-T
- Form 1098-T is required to be mailed to all students who were enrolled
during the 2013 calendar year. The information reported on the form will help
to determine whether the student may qualify for the Hope Scholarship or Lifetime
Learning credit. A copy of the form is also being furnished to the IRS.
- Form 8863
- Form 8863, Education Credits, is used to calculate the eligible amount of
the Hope and Lifetime Learning credit that can be claimed. This form must
be submitted with the taxpayer's tax return to claim the credits.
- Hope Scholarship Credit
- The Hope Scholarship is a tax credit, not a scholarship. The credit
applies to students who are: in their first two years of post-secondary
education (normally the freshman and sophomore year in college), is enrolled
in a degree-seeking program, and is enrolled at least half-time during one
academic period (semester or summer term at UH) during the 2013 calendar year.
The credit is applicable for expenses paid in 2013. Taxpayers may claim a
maximum credit up to $1,500, but the amount of the credit is phased out at
certain income levels.
Note: If a student does not meet the necessary requirements to qualify for the
Hope credit, they may be able to take the Lifetime Learning credit for part or
all of that student's qualified expenses instead. Note: The Hope credit may be
claimed for no more than 2 tax years for each student. See
for more details.
- Lifetime Learning Credit
- The Lifetime Learning tax credit applies to students in undergraduate,
graduate and professional degree programs and to students enrolled in
coursework to acquire or improve job skills. Students who are not eligible
to claim the Hope tax credit may be eligible to claim the Lifetime Learning
tax credit. This credit is not limited by the workload of the student and can
be claimed for an unlimited number of years. The credit is applicable for
payments made during the 2013 calendar year. Taxpayers
may claim a maximum credit of $1,000, but the amount of the credit is phased
out at certain income levels. See Publication 970 for more details.
- Qualifed Tuition and Related
- Includes expenses for tuition and fees required for enrollment or attendance.
Fees required to be paid as a condition of enrollment or attendance meet the
requirement of qualified tuition and related expenses. Does NOT include books,
supplies, equipment, room and board, insurance, medical expenses, transportation,
student activities, athletics (unless required for a degree-seeking program), or
other similar personal or living expenses.
- Tax Credit
- A tax credit is subtracted from the amount of taxes you or your family owes.
It differs from a tax deduction which is subtracted from your taxable income.