TaxGuyBill
Level 15

If she had the same answers for last year, it seems she should have had a credit larger than $1000.

*IF* $5764 is the correct amount of qualified expenses and *IF* the scholarships are allowed to be used for non-tuition (such as a Pell Grant), I would go to the Student Info worksheet, go to Part V, and enter $6124 on line 4 (that is the amount of taxable scholarships plus $4000).  That will allocate $4000 to the American Opportunity Credit (assuming she otherwise qualifies).  Maybe there is a better way to do it, but that is how I make it work.

In some cases it may be better to only allocate $2000 to the American Opportunity Credit (on line 4, enter the taxable scholarships plus $2000), but without knowing all of her information it is difficult to guess which is best.