DEFINITION of 'Hope Credit'
A nonrefundable education tax credit that can be claimed for students that have yet to complete two years of post secondary education. The Hope Credit may be taken for tuition and fees, but not room and board or books. The student incurring the expenses can be either the taxpayer, spouse or dependent. The Hope Credit is for 2008.
BREAKING DOWN 'Hope Credit'
The Hope Credit is one of two nonrefundable education credits available for taxpayers. The other credit is the Lifetime Learning Credit, which can be claimed after the Hope Credit has been exhausted. For example, in 2008 the Hope credit limited of $1,800 could be claimed separately for each student or dependent per year, but the limit applied to each. The credits are not available to taxpayers whose modified adjusted gross income exceeds a certain amount.