Notice 97-60 Administrative, Procedural, and Miscellaneous Education Tax Incentives
PURPOSE
The questions and answers contained in this notice provide guidance on the higher education tax incentives recently enacted by the Taxpayer Relief Act of 1997 (Pub. L. No. 105-34, 111 Stat. 788) (TRA '97). Specifically, TRA '97 added § 25A of the Internal Revenue Code providing the Hope Scholarship Credit and Lifetime Learning Credit, § 221 providing a deduction for student loan interest, and § 530 creating Education Individual Retirement Accounts ( Education IRAs ). TRA '97 also amended § 72(t) eliminating the early withdrawal tax on certain IRA withdrawals, § 127 providing an exclusion from income for employer-provided educational assistance, and § 529 setting the requirements for tax-exempt status for qualified state tuition programs (QSTPs).
These provisions create several new tax benefits for families who are saving for, or already paying, higher education costs or are repaying student loans. In addition, TRA '97 extends the exclusion for employer-provided educational assistance and makes the rules for qualified state tuition programs more flexible. The following discussion reviews in greater detail the requirements for each of these benefits. Whether a taxpayer may take advantage of these benefits depends on the taxpayer's individual facts and circumstances.
SECTIONS
- Lifetime Learning Credit
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