The following is provided for informational purposes only and was prepared to inform students about the benefits and requirements contained in the Tax Relief Act of 1997. Liberty University cannot provide tax advice. We ask that students and parents consult a tax advisor for additional information on eligibility or instructions on filing for these tax credits.
The Tax Relief Act of 1997, which effective with the 1998 tax year, established a Hope Tax Credit and a Lifetime Learning Tax Credit for eligible persons who are paying higher education costs for themselves or members of their families. These benefits are in the form of nonrefundable tax credits and are computed by totaling amounts paid for qualified tuition and enrollment related expenses reduced by grants, scholarships and other tax-free educational assistance. In addition, the Tax Relief Act also created the Student Interest Deduction, which allows a taxpayer to deduct the amount of interest they have paid toward loans that have been acquired to pay for various educational expenses.
Tax year 2003 was the first year in which educational institutions were required to report financial information to the Internal Revenue Service (IRS) and to the student via the IRS form 1098T.
Final regulations developed by the IRS for the Tax Relief Act of 1997 allowed educational institutions to choose whether the financial information reported for tax credits is based upon “payments received” or “amounts billed.” Liberty University will report amounts billed for qualified tuition and related expenses during the calendar year on all 1098T statements. Your qualified tuition and related expenses translates to tuition, the technology fee, activity fee, seminary activity fee, and course fees (as applicable). Liberty University is also required to report the total amount of scholarships and grants received during the year. This information is provided to assist in determining the amount of eligibility for the tax credits.
Internal Revenue Service Publication 970 and IRS Form 8863 explain which tuition and fee expenses qualify for education tax credits. At Liberty University, the following expenses are considered qualified expenses, are required for enrollment and meet the criteria specified by IRS:
Please note: the fees listed above may be contingent upon registration in a particular course.
IRS specifies that in order for qualifying expenses to be used for tax credits, they must be paid during the tax year (normally January 1 - December 31) by the taxpayer taking the deduction. The following payment types would meet the criteria specified by IRS: