Yes.
There is a tax “loophole” available. The student
reports all his scholarship, up to the amount needed to claim the American
opportunity credit, as income on his return. That way, the parents (or himself, if he is not a dependent) can claim the tuition credit on their return. They can
do this because that much tuition was no longer paid by "tax free"
scholarship. You cannot do this if the
school’s billing statement specifically shows the scholarships being applied to
tuition or if the conditions of the grant are that it be used to pay for
qualified expenses.
Using an example: Student has $10,000 in box 5 of the 1098-T
and $8000 in box 2.
At first glance he/she has $2000 of taxable income and nobody can claim the American
opportunity credit. But if she reports $6000 as income on her return, the
parents can claim $4000 of qualified expenses on their return.
From the form 1040 instructions (pg 47): “You
may be able to increase an education credit if the student chooses to include
all or part of a Pell grant or certain other scholarships or fellowships in
income.”
