I am on H1, wife on H4. We got married late 2006, and for the yr 2006 we filed jointly with she electing to be a resident. Since Fall 2007, my wife is pursuing her masters and I paid two semesters worth of tution in 2007. (~$7500). I know there are 2 credits, Hope Credit and Life Time Earning Credit for education. Since Hope gives me a deduction of $1650 whereas LifeTime earning would give me a credit of $1500 (20% of first $10000) I want to claim the Hope credit.

Looking at the IRS publication I believe I meet the guidelines
Generally, you can claim the Hope credit if all three of the following requirements are met.

* You pay qualified education expenses of higher education.
* You pay the education expenses for an eligible student.
* The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return.

I assume graduate school education is higher education and we definitely meet the other 2 criterion. I just wanted somebody to confirm that my understanding of the two credits is correct, that I am eligible to claim Hope Credit?

You can ONLY claim the Lifetime Learning Credit, or claim the tuition as an adjustment to income.

The Hope Credit is for freshman and sophomores in undergraduate school and is NOT an option for you.

Hey ATL,
Thanks for the response. Trying to get in touch with the IRS on their helpline is so time-consuming.