The Taxpayer: An eligible taxpayer must file a federal tax return and owe taxes to claim the Hope credit. In addition, the taxpayer must claim an eligible student as a dependent on the tax return, unless the credit is for the taxpayer or the taxpayer’s spouse. (This means the eligible taxpayer may also be the eligible student.) In 2006, taxpayers cannot claim a Hope credit if their Modified Adjusted Gross Income (MAGI) is $55,000 or more for a single taxpayer, or $110,000 or more for married taxpayers filing a joint return. MAGI limits were increased by $2,000 for single taxpayers by $3,000 for married taxpayers filing jointly in the 2006 tax year.
The Student: An eligible student must be enrolled at least half-time for at least one academic period beginning in 2006 at an eligible program leading to a degree or certificate at an eligible school AND can not have completed the first two years of undergraduate study. You may claim the credit yourself if you are not claimed as a dependent by another taxpayer. (Once again, this means that the eligible student may also be the eligible taxpayer.) Students convicted of a federal or state drug felony before the end of 2006 are not eligible for the Hope credit.
