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IRS offers tax break for students

By Rachael Myer
Arizona Daily Wildcat
February 1, 1999
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UA underclassmen can receive up to a $1,500 tax break on tuition payments this semester as part of the 1997 Education Tax Relief Act.

University officials are required by federal law to mail students paperwork today that will offer upperclassmen, part-time and graduate students up to $1,000 in savings, while freshmen and sophomores can save a maximum of $1,500.

"The Hope Credit and Lifetime Learning Credit are benefits to the individual because they are paying for the education," said Bill Brunson, Phoenix Internal Revenue Service Communication Specialist. "It is helping them because they are getting some of this money back."

The Hope Credit, calculated according to tuition payments and income, can give freshmen and sophomores up to $1,500 if the student meets university and government requirements.

Students have to have at least six credits and must be enrolled in a degree or certificate program to qualify for the credit.

The other education tax break, the Lifetime Learning Credit, can save upperclassmen and graduate students a maximum $1,000.

Depending on who pays the tuition, students or their parents must have a tax-adjusted income of $50,000 or less if the tax-payer is single, and $100,000 or less for those who are married or financially dependent.

Both credits can be applied to tuition and fees paid by student loans.

To earn a tax credit, students need to complete another document - Form 8863 - and submit it to the IRS with their other tax forms by April 15. The paperwork is available from the IRS or tax agencies like H&R Block.

Every UA student that was registered for classes in 1998 was mailed a letter last semester informing them about the tax credits, said Stephen Buckler, coordinator for the Center for Computing and Information Technology Program. The CCIT staff joined other departments to form a team that deals with the new tax credits.

Government and Internal Revenue Service regulations place a burden on college institutions with the paper-work related to the tax credits, Buckler said. However, the labor is worthwhile considering the service provided for students and parents, he said.

"It is more administration that doesn't really do us any good," he said. "It is fantastic that the government is offering tax credits for getting an education."

Find out if you qualify for federal education incentives at the IRS Web site. UA students also can log in to Student Link and discover more information about the 1098-T forms they will be receiving in the mail soon.