The Eligibility for Claiming Hope Credit - Essay Example

The monetary limits for Hope credit for 2006 are greatly reduced if the person’s Modified Adjusted Gross Income (MAGI) is between $45,000 and $55,000 ($90,000 & 110,000 if it is joint returned) A claim under Hope cannot be filed if the person’s MAGI is $55,000 or more (Joint Income cannot exceed $110,000 or more)
It is further said that if the parents claim an exemption on their tax returns for a dependent who is an eligible student, then the claim for Hope Credit may be made based on the expenditure of the dependent. If however, the parents do not claim the exemption in the Tax returns for the dependent student, the dependent can claim the Hope Credit.

Issues

Here George and Lousie do not claim an exemption for the Education expenses paid for their daughter Jamie’s education.
Analysis
Since her parents have not claimed the deductions in their Joint Tax returns, Jamie is entitled to claim the amount of Hope Credit available, in her Tax Returns for the year 2006. The rule regarding Hope Credit per eligible student is the Sum of:
1. Full 100% of the 1st $1100 of the Qualified Educational Expenses paid for the eligible student
2. 50 % of the next $1100 of Qualified Expenses paid for the eligible student.

(Tax Benefits for Education, 2006).
Therefore Jamie is entitled to a total credit of $ 1650 in her Tax Returns for 2006.
Conclusion
Here, it is found that the parents of Jamie are not claiming the benefits of the Hope Credit in their Joint Tax Returns. Therefore, if their daughter and the local university meet all the requirements of Hope Credit, she could claim a total amount of $ 1650 on her Tax Returns for 2006 as Hope Credit. (2006). Read More