- Sep 12, 2001
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http://articles.moneycentral.m...ion-rebate.aspx?page=1
I dropped about $4k in tuition this year. The credit is for people going to school at least half-time - I am full time this spring & summer, and will finish my degree (AA) in September.
However, I don't have a 529 account (wtf is that?). Can anyone explain very briefly in layman's terms?
Millions of students and parents struggling to raise cash for college this fall could have a happy surprise early next year: a tax credit of up to $2,500.
The new higher-education tax credit, which was part of the stimulus bill signed into law in February, is expected to put hundreds, if not thousands, of dollars into the pockets of millions of Americans who write tuition checks this year. Better yet, students don't have to fill out any extra financial-aid applications to get the new money. They just file their tax returns.
"This will definitely help people," says Jackie Perlman, an analyst for H&R Block's Tax Institute.
Of course, like most things in the federal tax code, the rules are a little complicated. But experts such as Perlman say the new credit is bigger and more inclusive than previous higher-education tax credits, which were so complicated that more than a quarter of eligible taxpayers failed to get a penny, and those who were able to collect typically got less than $900.
You can claim 100% of your first $2,000 spent in 2009 on tuition, fees or course materials. You can claim 25% of the next $2,000 spent on the same things. So if you have $4,000 in course-related expenses, you can take $2,500 off whatever you owe the Internal Revenue Service. If you earn so little that you don't owe the IRS that much, then the government will send you a check for 40% of whatever extra credit you qualify for, up to a maximum of $1,000.
I dropped about $4k in tuition this year. The credit is for people going to school at least half-time - I am full time this spring & summer, and will finish my degree (AA) in September.
However, I don't have a 529 account (wtf is that?). Can anyone explain very briefly in layman's terms?