1.Rule to use in subtracting amounts from the tuition and fee total:
Ask yourself: Will I have to repay This amount?
This amount = 3rd party payments, grants, or scholarships.

If you answer "No", the amount should be subtracted from the tuition and fee total and the net figure should be used in determining whether you are eligible to receive a tax credit.

Exception to the rule (scholarships only): If the entity granting your scholarship does not require that the scholarship be used specifically to pay tuition and fees (ie: you may use it for books, room, board, etc), you may not have to subtract this amount from the tuition and fee total. Please consult the IRS or your tax professional for further guidance.

2.Payments for the term beginning in January 2004 must be made before December 31, 2003 to qualify for the credit on your 2003 taxes. Spring 2004 tuition rates are the same as Fall 2003. Information for the January 2004 term is not reflected on your 2003 substitute form 1098-T.