97-11-24 Tuition Deadline Extended for Tax Credit PAYMENT DEADLINE EXTENDED SO STUDENTS CAN CLAIM TAX CREDIT COLUMBUS -- The Ohio State University is offering first and second-year students who need to utilize their winter quarter tuition and general fees for the Hope Scholarship Tax Credit the opportunity to delay that payment until after the first of the year. This will allow them or their parents to claim the payments on their 1998 federal tax returns under the newly enacted Hope Scholarship federal tax program. The Hope Scholarship Tax Credit, proposed by President Clinton and recently enacted by Congress as part of the Tax Relief Act of 1997, takes effect on Jan. 1, 1998. It provides up to $1,500 a year in tax credits for the first two years of post- high school education. The Jan. 1 implementation date makes this delay a one-time need, said Brad Myers, senior associate registrar at Ohio State. “After this quarter, it shouldn’t matter -- all eligible payments after Jan. 1, 1998 should be covered.” The law permits taxpayers to deduct all of the first $1,000 in covered expenses and 50 percent of the next $1,000 while enrolled at least half-time in the first two years of post- secondary education in a program leading to a degree. The benefit is a tax credit, not a deduction from eligible income, meaning that the taxpayer’s bill is reduced by up to $1,500 a year for up to two years. At Ohio State, qualified payments would be the instructional and general fees, familiarly known as “tuition,” and the non- resident fee charged to out-of-state students. Certain financial awards that do not need to be repaid, such as scholarships, grants and employee fee authorizations, will reduce qualified expenses. Loans should not reduce qualifying expenses. Expenses for books, activities, residence hall contracts, insurance, parking and other fees are not likely to qualify. Myers said the IRS has not yet published any guidelines or regulations regarding eligibility for the tax credit. Therefore, Ohio State is making the delayed payment option available to all who might qualify based on information currently available. “We don’t decide who’s qualified; the IRS does,” he said. “We just want to do what we can to ensure that all qualified Ohio State students are able to take full advantage of this benefit.” Explanatory materials will be mailed to all students with their winter quarter schedules and fee statements beginning the week of Dec. 1. Approximately 20,000 undergraduates in their first or second year of study will receive a form on which they can indicate their intention to delay payment of tuition and general fees until after Jan. 1 if they think they are eligible for the credit. All other fees, such as those for room and board, parking and insurance, will be due at the regular time, Dec. 16. Upper-level undergraduates, graduate and professional students, continuing education students and students taking fewer than six hours of credit -- all of whom are ineligible for the Hope Scholarship -- will receive slightly different materials. If they believe they do qualify for the Hope Scholarship, they may request further information and consideration for the payment delay, Myers said. The Tax Relief Act of 1997 also provides a Lifetime Learning Tax Credit, which applies to all levels of post-secondary education. It provides a tax credit of up to 20 percent for the first $5,000 of qualified expenses annually, but it does not take effect until July 1, 1998, so there is no need for delayed payment. This program is also noted in the materials sent by the Registrar’s Office. Because the law is so new, the IRS and other government agencies have not worked out all the details of reporting and eligibility, Myers said. However, it appears that the tax act will require universities to begin collecting and reporting data they have never before gathered. For instance, the IRS has said universities may be required to submit records indicating how students file their tax returns -- independently or as dependents on parents’ returns, in which case the parents’ Social Security numbers must be reported. “These tax credits -- both the Hope Scholarship and the Lifetime Learning credit -- can be of tremendous benefit to the vast majority of our students,” Myers said. “We are committed to doing whatever we can to see to it that our students get the opportunity to take full advantage of them. However, the cost to the university will be significant; the programs don’t include any funding for the increased data collection, records management and reporting required under the law.” Students and parents with questions about the programs are advised to check with their tax advisers or the IRS, which has set up a special phone line at (202) 622-4910 for questions. Two web sites also provide helpful material. The IRS site is http://www.irs.ustreas.gov/hot/tax-law/html The Ohio State University Treasurer’s office has set up its own web site with links to the IRS site and others addressing this issue. Its address is http://www.finance-admin.ohio-state.edu/treasurer Questions specifically about the delayed Winter Quarter 1998 tuition at Ohio State may be directed to the Office of the Registrar at (614) 292-8500. Information sheets are available for pick up at the Registrar’s Office at 320 Lincoln Tower, 1800 Cannon Drive. # Contacts: Gene Schuster, registrar, or Brad Myers, senior associate registrar, (614) 292-1556. Written by Ruth Gerstner, University Communications, (614) 292-8424. [Submitted by: Von Vargas (vargas.12@osu.edu) Mon, 24 Nov 1997 14:11:46 -0500 (EST)] All documents are the responsibility of their originator.