TaxGuyBill
Level 15

His parents' tax returns would need to be checked if they claimed the American Opportunity in the past or not (and how many times).

For scholarships allow you to do this:

 

If there is enough tuition and scholarships, rather than claiming $2500 as excess scholarships, you can claim $4500 (or $6500) as excess scholarships.

That would allow $2000 (or $4000) of tuition to be used for the American Opportunity Credit .  The result would be a $2000 (or $2500) tax credit.  The tax credit would save much more in tax than the extra income tax on the excess scholarships.

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