Hope Credit Amount for Tax Year 2006

The maximum Hope Credit has been increased from $1,500 to $1,650 for each eligible student. Below is an explanation of the change in calculation of the Hope credit:

PRIOR TO YEAR 2006: The Hope credit was calculated by taking 100% of the first $1,000 of qualified tuition and related expenses and 50% of the next $1,000 of such expenses.

NEW FOR 2006: The Hope credit is calculated by taking 100% of the first $1,100 of qualified tuition and related expenses and 50% of the next $1,100 of such expenses.

For tax year 2006, the Hope Credit is gradually reduced if your modified adjusted gross income (MAGI) exceeds $45,000 ($90,000 if married filing a joint return) and is completely eliminated if your MAGI exceeds $55,000 ($110,000 if married filing a joint return).

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