Hope Education Tax Credit

[mariet]

I have an 18 year old son who is attending college. I will be claiming him as a dependent on my tax form. His college tuition for 2005 was paid with grants and a subsidized Stafford student loan. Can I claim a Hope tax credit based on the following information taken from the IRS website:

If tuition was paid by a government subsidized loan, can I still take the
Hope or Lifetime Learning Credit?

If you take out a loan to pay higher education expenses, those expenses
may qualify for the credit if you will be required to pay back the loan. The
credit is claimed in the year in which the expenses are paid, not in the year in which the loan is repaid.

Also from IRS website:

When a child is claimed as a dependent on the parent's return, any qualified tuition and related expenses paid by the child during the year are treated as if the parent had paid them and, therefore, are included in calculating the parent's Lifetime Learning Credit.

I should add that the Stafford Loans were taken out in my son's name. Thus my question as to whether we could take the credit. He will not be filing a tax form and will not be taking the credit himself.

[LdiJ]

If your son is your dependent then yes, you absolutely should be claiming an education credit. If your son is a freshman or sophmore in college then you should be claiming the Hope credit rather than the Lifetime credit.

However, the amount of tuition that you can claim towards the credit is reduced by the amount of grants or scholarships that your son recieves (not student loans)

Your son should have recieved a form 1098 from his school. The form will list the total paid as well as any grant/scholarship money. Deduct the grant/scholarship money from the total paid and the remainder is the amount you can claim towards the credit.