Education Credits

Paying for College
1

<p>Thanks so much for your help! My D is going to college this year and I would like to estimate my EFC for next year. </p>

<p>Here are my questions:</p>

<p>Are the education credits (Hope and Lifetime Learning tax credits) considered untaxable income? or will the credits reduce my allowance as "income tax paid"?</p>

<p>Thanks again :)</p>

2

<p>No. They have no effect on the EFC. As they reduce your tax they increase available income. But the FAFSA asks what you had in Ed. tax credits and reduces the income by these amounts so as not to penalize you, financial aid wise, for taking the credits. (this is for FAFSA, I don’t know how CSS treats them).</p>