can i receive a greater refund than federal taxes paid if i claim the hope tax credit?

Last year i claimed the Hope Tax Credit and i believe i received an excess of a refund compared to federal taxes paid. This year, i graduated nursing school and would like to claim the Hope Tax Credit for the Second year. That would mean I earned $9152 as a full time student and paid $333 to federal withholdings. Will I receive more than $333 back with this credit? Thanks!!!!

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  • j-man
    Lv 4
    1 decade ago
    Best answer

    No, the college tax credits (Hope and Lifetime Learning) are not 'refundable' tax credits. This tax credit will only wipe out any income tax liability you have to the Federal government. You will only get your $333 back.

    In your case, if you are single and you are claiming yourself (and nobody else), then most of your income is already not taxed. If you did not claim the education tax credit but rather claimed this as "Tuition and Fees Deduction" (Line 34 on form 1040), you may be better off because your adjusted gross income will be low enough that you will get all of your $333 back, plus it can increase your state refund. Most (if not all) states that have an income tax determine your taxable income by using your adjusted gross income (line 38 on form 1040).

    If you claim the Hope Credit, then your adjusted gross income would be $9,152. The Feds will not tax the first $8,750 ($5,350 std deduction, $3,400 exemption). That means only $402 is taxable. The Hope Credit would probably wipe out that tax owe. You would get your $333 back. But your state income tax would be charged with $9,152 adjusted gross income.

    If you claim the deduction (and not Hope credit), then you Gross adjusted income would be $9,152 - minus what you paid in tuition (the deduction is capped at $4,000). The $5,350 std deduction would wipe out any taxable income, so you would get yoyr $333 back. But when you do your state taxes, you will taxed with an Adjusted Gross Income of only $5,152. Doing this will give you the same federal refund, but may help your state refund.

    Try it both ways and see which works best for you.

  • Judy
    Lv 7
    1 decade ago

    Education credits, including the Hope credit, can only be used to reduce your tax, to zero if you have that much, but can't give you back more than you had withheld. So no, the most you could get back is what you paid in, or $333.

    There are a couple credits where you CAN get back more than you paid in - Additional Child Tax Credit and Earned Income Credit, if you're eligible for one or both of those.

    If you earned $9152 in 2007, and don't have any dependents, your tax would be $383 if you are single and are a dependent, or $41 if you are single and not a dependent. The Hope credit in either case would probably reduce your tax to zero so you'd get back everything withheld for federal income tax.

  • Mark S
    Lv 5
    1 decade ago

    The Hope Credit is non-refundable. This means it cannot be greater than the amount of taxes paid in.

    The only refundable credits -- credits than can increase the amount of your refund to greater than what you paid in -- are The Earned Income Credit, Additional Child Tax Credit and the credit for excess Social Security Tax Withheld. They are listed in the payment section of the 1040, not the credit section.

    Source(s): 16 years experience as tax professional and Enrolled Agent
  • Anonymous
    1 decade ago

    Well, maybe. If you use the Hope Credit to wipe out your income tax liability and are entitled to Earned Income Credit, you may end up with a refund greater than your withholding.

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  • Anonymous
    1 decade ago

    None of the Education credits are refundable credits, so the answer is no - the max you can get back is the amount you paid in through withholding or estimated payments.

  • 1 decade ago

    The Hope Credit is a "non-refundable" credit. This means that, while it can reduce your tax liability to zero, it can not by itself create a refund.

    The only credits that can create refunds are the Earned Income Credit and the Additional Child Tax Credit.

  • 1 decade ago

    No, the education credits are non-refundable. Non-refundable credits can reduce your tax to zero, but you don't get the remainder back.

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