Tax Relief Act

TAXPAYER RELIEF ACT OF 1997 (TRA '97)

The information below is provided to give basic information to students about some tax benefits that are available under The Taxpayer Relief Act of 1997. This should not be considered an official document. For additional information, please refer to the list of official documents at the end of this web page. Texas A&M University is not giving tax advice. If you are seeking tax advice, please contact a professional tax consultant or the Internal Revenue Service at (800) 829-1040.

Hope Scholarship Credit
(Educational Credit)
Lifetime Learning Credit
(Educational Credit)
Student Loan
Interest Deduction
-  Reported on IRS Form 1098-T (No dollar amounts required for reporting on form in 1999). -  Reported on IRS Form 1098-T (No dollars amounts required for reporting on form in 1999). -  Reported on IRS Form 1098-E (If interest payments made for $600 or more during 1999).
-  Taxpayers may be able to claim payments made during 1999 for qualified tuition & fees of up to $1,500 per eligible student. -  Taxpayers may be able to claim payments made during 1999 for qualified tuition & fees of up to $1,000 per family. -  Taxpayers may be able to claim interest payments made and applied to a qualified student loan during 1999 up to $1,500.
-  Students that have not completed the first two years of postsecondary education may qualify. -  This credit is not limited to students in the first two years of postsecondary education. -  A qualified loan must have been issued for qualified higher educational expenses furnished during a period when the recipient was an eligible student at an eligible educational institution.
-  Students must be enrolled in a program leading to a degree, certificate, or other recognized educational credential. -  Eligible students may be able to claim this credit regardless of the number of courses taken at an eligible educational institution.  This includes graduate-level degree work. -  The loan must have been issued when the student was enrolled in a degree, certificate, or other recognized educational credential in order to be qualified.
-  Students must be enrolled at least one-half of the normal full-time workload in their course of study during one academic period during 1999. -  This credit can be claimed for an unlimited number of years for eligible students per family. -  The loan must have been issued when the student was enrolled at least one-half of the normal full-time workload in their course of study in order to be qualified.
-  Students must be free of any felony conviction for possessing or distributing a controlled substance. -  Single taxpayers benefits phase out between $40,000 and $50,000.  Married taxpayers benefits phase out between $80,000 and $100,000. -  Interest can only be claimed for payments made within the first 60 months that payments are required.
-  This tax credit can only be claimed for two tax years per eligible student. -  Married taxpayers wanting to claim this tax credit must file jointly. -  Married taxpayers filing a separate return do not qualify.
-  Single taxpayers benefits phase out between $40,000 and $50,000.   Married taxpayers benefits phase out between $80,000 and $100,000. -  The Lifetime Learning credit is calculated by taking 20% of the first $5,000 paid and applied to a student or students qualified tuition and related expenses.  Tax-free funds may not be used in this calculation. -  If someone claims you as a dependent this deduction can not be taken.
-  Married taxpayers wanting to claim this tax credit must file jointly. -  IRS Form 8863 must be used to claim this credit and then attached to IRS Form 1040 or 1040A. -  Single taxpayers benefits phase out between $40,000 and $55,000.  Married taxpayers benefits phase out between $60,000 & $75,000.
-  The Hope credit is calculated by taking 100% of the first $1,000 plus 50% of the next $1,000 for payments applied toward a students qualified tuition and related expenses.  Tax-free funds may not be used in this calculation. **  See Resources Below -  This deduction can be claimed when filing one of these IRS forms:  Form 1040, 1040A, 1040NR and 1040NREZ.
-  IRS Form 8863 must be used to claim this credit and then attached to IRS Form 1040 or 1040A.   **  See Resources Below
**  See Resources Below    

Sources of Additional Information:

Websites: Department of Treasury Internal Revenue Service http://www.irs.ustreas.gov/
U.S. Department of Education http://www.ed.gov/
National Association of College and University Business Officers http://www.nacubo.org/website/members/issues/bulletins/irs9773.html

  • Internal Revenue Code:>
    • Section 25A (Hope and Lifetime Learning Credits) Section 6050S (Returns Relating to Higher Education Tuition and Related Expenses)
  • Department of Treasury Internal Revenue Service:
    • Publication 970 (Tax Benefits for Higher Education)
  • IRS Notices:
    • 97-60 (Education Tax Incentives)
    • 97-73 (Returns Relating to Higher Education Tuition and Related Expenses)
    • 98-7 (Returns Related to Interest on Education Loans)
    • 98-46 (Extension of 1998 Reporting Requirements to Tax Year 1999)
    • 98-59 (Part III - Administrative,Procedural and Miscellaneous)
  • IRS Forms
    • Form 1098-T (Tuition Payments Statement)
    • Form 8863 Education Credits (Hope and Lifetime Learning Credits)
    • Form 1098-E (Student Loan Interest Statement)