AUSTIN, Texas — The University of Texas at Austin will allow students eligible for the HOPE Scholarship (Tax) Credit, a provision of the 1997 Federal Taxpayers Relief Act (TRA ’97), to pay spring 1998 tuition and fees in January instead of December to take advantage of this tax savings opportunity.
The HOPE Credit allows an income tax credit of up to $1,500 per student for qualified tuition and fee expenses incurred during the first two years of post-secondary education. It is effective for tuition and fee expenses paid after Dec. 31, 1997, for academic periods beginning after that date. Freshmen and sophomores should consult their tax advisers to determine whether they would benefit from paying tuition and fees in January (Some income restrictions may affect eligibility for the HOPE Credit).
Although seniors and graduate students are not eligible for the HOPE Credit, other provisions of the act may be of benefit, such as the Lifetime Learning Credit available for expenses paid after June 30, 1998. Some juniors may be eligible for the HOPE Credit, depending upon how the IRS rules on the issue of advance placement. The IRS is still reviewing this and other issues related to the TRA ’97, and expects to release further guidelines in 1998.
The IRS has issued “Notice 97-60-Guidance on Education Tax Incentives” to assist taxpayers in understanding the incentives enacted under TRA ’97. The full text of this IRS notice can be found at the following National Association of College and University Business Officers (NACUBO) website:http://www.nacubo.org/website/members/issues/bulletins/irs9760notice.html.