What is the difference between the Hope credit and the lifetime learning credit?
While both credits essentially allow you to lower your tax burden by subtracting certain educational expenses, there are certain key distinctions between the two credits, principally:
1. For the 2006 tax year, the maximum amount of the Hope credit is $1,650, while the maximum amount of the lifetime learning credit is $2,000.
2. The Hope credit can only be claimed for any one student on two returns (i.e., for two years), while the lifetime learning credit can be claimed for the same student for any number of years.
3. Related to the second distinction, the Hope credit can only be claimed during the student’s first two years of post-secondary education, while the lifetime learning credit can be claimed at any point during the student’s educational career.
4. For the Hope credit, the student must be seeking a degree (or similar credential), while the student does not need be seeking any specific credential for the lifetime learning credit.
5. Related to this last point, the student must have been enrolled at least half-time for the Hope credit to apply, while the lifetime learning credit can be claimed even if the student only took one course.
6. The Hope credit cannot be claimed if the student has any felony drug convictions, but the lifetime learning credit can still be claimed.