Scholarship Credit - This credit may be elected only for a student's first two years of post-secondary education. The HOPE credit equals 100 percent of the first $1,000 plus 50 percent of the second $1,000 of qualified education expenses paid during a taxable year. Qualified education expenses include tuition and fees, but not room and board or books. The credit is phased out for joint filers with modified adjusted gross income (AGI) between $90,000 and $110,000 in 2006 ($45,000 and $55,000 for single filers). The modified adjusted gross income amounts are adjusted annually for inflation.