TaxGuyBill
Level 15

Yes, you can get an educational credit (assuming all other requirements are met).

If the scholarships are larger than the tuition, that means the scholarships are allowed to be spent on non-tuition items.

One Line 7 of the Student Info Worksheet (see picture) enter a number that is $4000 less than the TOTAL amount of tuition (from both colleges).

That will allow $4000 of tuition to be used for educational credits on the parents' return (I used $4000 assuming you were going to use the American Opportunity Credit).

The amount of scholarships not used for tuition (Line 9 on that worksheet) is taxable on the student's tax return.  If the student's total income on his tax return is over $12,000, then Kiddie Tax may apply (depending on the numbers, that might mean it may be better to only allocate $2000 to the American Opportunity Credit).

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