Click here to go to the NEW College Discussion Forum

I read about a $1500 tax credit for the first 2 years of college. Does anyone know if that is only if money was spent on tuition or fees, or would money spent on room and board be eligible for this credit?

By Emeraldkity4 (Emeraldkity4) on Sunday, May 04, 2003 - 08:39 pm: Edit

only money that is spent on tuition

By Thedad (Thedad) on Monday, May 05, 2003 - 12:03 am: Edit

It's also income capped (AGI?) at something like $82,000. (Please, I'm not being cavalier here: what would be regarded as wealthy or well to do in many parts of the country is middle middle-class in high expense areas.)

By Boysmom (Boysmom) on Monday, May 05, 2003 - 08:25 am: Edit

It starts to phase out at $82,000 but you don't lose it completely until $102,000. It is 100% of the first $1000 spent on tuition and fees, and 50% of the next $1000. It can be used when the student is a freshman or sophomore, so technically can be used for 2 out of the first 3 years of college. (A student is a freshman for the first semester of the year they graduate from high school, a freshman and sophomore in the second year, and a sophmore the third.) You can use the two years which are most beneficial. After the two years, you can use the Lifetime Learning credit which this year is 20% of the first $5000. This will be going up. The student must be a dependent. So if the parent's income is too high for the credit, the student (if they have enough income) could declare their own exemption and claim the credit.

If the parents make too much for the credit, they can use the tuition deduction instead. That allows a deduction of up to $3000 of tuitions and fees with an income of under $130,000

By Thedad (Thedad) on Monday, May 05, 2003 - 10:16 am: Edit

Thanks for clarifying, Boysmom. I'm still in the shallow end of the finanical aid pool and obviously was misinformed about the $82K cut-off. Reminds me of the time I went to Casablanca for the waters....