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 Institution
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 institution.
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 Publication 970 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 Expenses
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.