IRS Expands Education Tax Credits For Students

Thu, 2009-02-26 10:09 -- univcomm
February 26, 2009

Anderson University was recently made aware of the passage of the Midwestern Disaster Tax Relief Act of 2008 (the Act). The Act provides for an expansion of the IRS Education Credits for students attending an eligible educational institution located in a Midwestern Disaster Area. Students attending Anderson University may qualify since Madison County is one of the designated counties.

Under the Act the Hope Credit has been increased to 100 percent of the first $2,400 in qualified expenses and 50 percent of the next $2,400 in qualified expenses for a maximum credit of $3,600 per student. The Lifetime Learning Credit has increased from 20 percent to 40 percent. The definition of “qualified education expense” has also been expanded.

According to Ken Nieman, AU Director of Student Financial Services, because of AU's location in a declared disaster area, students or their parents may have increased eligibility for the Education Tax Credits when filing their 2008 and 2009 federal income tax returns.

"As this has the potential of being overlooked when preparing your return, we have been making efforts to get the word out, using our web site and direct mailings. Families should by all means mention this to their income tax preparer or reference the IRS publications before tackling their own return. However, we are not able to provide specific income tax advise," said Nieman.

One of the more important tax law change for 2008 and 2009 is that the definition of qualified education expense now includes cost of books and room and board charges or, for those students living off campus or at home, the amount the university used in determining financial need. For the 2008 Calendar Year, Anderson University used the following living expense estimates in the determination of students’ financial need:

Dependent Students Independent Students
Living with Parents Off Campus Living with Parents Off Campus
January - April $2,200 $2,450 $2,200 $7,865
May - August $2,200 $2,450 $2,200 $7,865
September - December $2,500 $2,750 $2,500 $8,160

Student Financial Services encourage you to refer this matter to your professional income tax preparer since Anderson University will not be able to provide you with specific income tax advice or guidance. Special IRS assistance is available by calling 1-866-562-5227, Monday through Friday from 7 a.m. to 10 p.m. local time. For additional information please refer to IRS Publication 4492-B – Information for Affected Taxpayers in the Midwestern Disaster Area and Publication 970 – Tax Benefits for Education, both which are available for download at www.irs.gov.

Anderson University is a private Christian university of 2,800 undergraduate and graduate students in central Indiana. Anderson continues to be recognized as a top Christian college: in 2008, U.S. News and World Report ranked Anderson University among the best colleges and universities in the Midwest for the fourth consecutive year. Established in 1917 by the Church of God, Anderson University offers more than 65 undergraduate majors and graduate programs in business, education, music, nursing and theology.