Income Tax Deductions and Credits

You may be able to deduct expenses you have for education that is required by your employer, or by law or regulations, to keep your salary, status or job, or that maintains or improves skills required in your present work. If your education qualifies, you may deduct the cost of items such as tuition, books, supplies, lab fees, travel and transportation (Internal Revenue Service Publication 508, Rev. Nov. 86).

Taxpayer Relief Act of 1997
This information is provided to help you determine how the Taxpayer Relief Act may apply to you. Questions related to your tax situation should be addressed directly to the IRS or your tax consultant or accountant. The contact person for UCSC Extension is the Extension Registrar at (831) 427-6606 or cwalker@ucsc-extension.edu.

Both of the credits below phase out for income levels $40,000-$50,000 single; $80,000-$100,000 joint:

The Lifetime Learning Credit
As of July 1, 1998, taxpayers may be eligible to claim a nonrefundable Lifetime Learning Credit against federal income tax for the qualified tuition and related expenses of the students in the taxpayer’s family (the taxpayer, the taxpayer’s spouse, or an eligible dependent) who are enrolled in eligible educational institutions in at least one course leading to a degree, certificate, or improved job skills.

The Hope Scholarship Credit
As of January 1, 1998, taxpayers may be eligible to claim a nonrefundable credit against federal income taxes for each student in the taxpayer's family (the taxpayer, taxpayer’s spouse, or an eligible dependent) enrolled at least half-time in one of the first two years of post-secondary education in a program leading to a degree, certificate, or other recognized educational credential.

Reporting Requirements
The Social Security number (or TIN, Taxpayer Identification Number) is the key to reporting. University of California Extension must have your Social Security number for reporting purposes.

Information Resources
Taxpayer Relief Act of 1997: www.ed.gov/inits/HOPE/taxact.html

Families' Guide to the 1997 Tax Cuts for Education: www.ed.gov/inits/HOPE/9791tax.html

Taxpayer Advice by Telephone
(800) 829-1040; Monday­Friday, 7:30 am­5:30 pm

Student/Taxpayer Information Center
Web site: www.1098-T.com
Phone: (877) 467-3821