Tax questions

April 09, 1999

Members of the Maryland Association of Certified Public Accountants are answering readers' tax questions through Thursday.

My son, 25, works full time and goes to college part time, and we help pay his tuition although he is, for tax purposes, no longer our dependent and does not live at home. Can he claim one of the new education credits?

Two different federal educational expense credits may be available to your son. The Hope Scholarship Credit provides a maximum allowable credit of $1,500 per student for each of the first two years of post-secondary education. The Lifetime Learning Credit allows a credit of 20 percent of qualified tuition expenses paid by the taxpayer for any year the Hope credit is not claimed. The Lifetime credit is for expenses paid after June 30, 1998, for education furnished in academic periods after that date. The Hope credit is for expenses paid after Dec. 31, 1997. The allowable amount of the credit is reduced for taxpayers who have modified adjusted gross income above certain amounts, and is completely phased out when modified adjusted gross income reaches $50,000 for single taxpayers.

Daniel F. McGuire, CPA, Arthur Andersen The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary.

Pub Date: 4/09/99

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