I am writing today to enlist your help in making sure that all eligible students and families know that the new Hope and Lifetime Learning tax credits are now available.

By directly reducing the amount of federal income tax owed, the Hope and Lifetime Learning tax credits help students and families meet the cost of postsecondary education, including bachelor’s degree programs, graduate or professional study and vocational or job-related training.

A taxpayer can claim a Hope tax credit of up to $1,500 for two years for each student in a family (including taxpayer, spouse, and dependent children) who is enrolled in higher education at least half-time at an eligible educational institution and who has not yet completed the first two years of study.

The Hope tax credit covers qualified expenses paid on or after Jan. 1, 1998. The Lifetime Learning tax credit is available for vocational, college, graduate and professional students and adults who want to upgrade their job skills, acquire new ones or pursue another course of study, and even for a student taking one course as long as it is job-related.

For the 1998 tax year, tax filers can claim a Lifetime Learning credit up to 20 percent of the first $5,000 paid in qualified tuition and fees on or after July 1, 1998.

Both credits are phased out for joint filers who have between $80,000 and $100,000 of adjusted gross income, and for single filers who have between $40,000 and $50,000 of adjusted gross income.

Taxpayers cannot claim both credits for the same student in one tax year.

Qualified expenses covered by the tax credits include tuition and required fees, less any grants and scholarships that are received tax free.

Room, board, books, and supplies are not covered. To take advantage of the Hope and Lifetime Learning tax credits, taxpayers must complete and submit IRS form 8863 with their federal tax return.

For more information, call the IRS Help Line at 1-800-829-1040, read IRS publication 970 or consult a tax adviser.

I hope you will help to spread the word about these important tools that make college and continuing education more affordable.

Richard W. Riley

Secretary of Education