No, Federal Work-Study wages, from being a Student Employee, do not count as a scholarship or a grant. As the name implies, these are wages (money you earn and get taxed on) versus scholarships or grants (money you receive, generally tax free).
When TurboTax asks "Was Any of Your Financial Aid Already Included in Income?", it is referring to Form 1098-T Tuition, Box 5, Scholarships. If your scholarships are more than what you paid for qualified education expenses, TurboTax will tax those scholarships. If you include your Federal Work Study wages, you will be taxed twice.
If you are not claimed by your parents as a dependent, yes, you may qualify for the American Opportunity Tax Credit. For additional information, click on Who is eligible to take the American Opportunity Tax Credit?
3. Work-Study Funds Are Not Applied Directly to Your Tuition: Unlike other types of financial aid, work-study earnings are not applied directly to your tuition and fees. Students who are awarded work-study receive the funds in a paycheck as they earn them, based on hours worked, just like a normal job. These earnings are meant to help with the day to day expenses that students have and are not meant to cover large costs like tuition and housing. Reference 8 Things You Should Know About Federal Work-Study - ED.gov Blog
