Turbo tax is not allowing me to take my Am Opp education credit because box 5 is > than Box 1. My student did not have expenses for spring 2021

[moveverk]

as long as I paid more than $ 4000 in qualified education expenses, which i did, I should still qualify for the credit just like the previous 3 years

[JoannaB2]

 A form 1098T is used to report tuition paid to higher educational institution to get a degree or diploma.  A student may claim his/her qualified expenses paid for American Opportunity Credit ($1,500 non-refundable credit applied towards tax liability and $1,000 as refund) or Lifetime Learning Credit, if AOC been claimed for 4 years. You may follow the steps below to enter 1098T in Turbo Tax: To claim for the credit:

Scholarship is a tax-free amount paid to a student enrolled at higher educational institution for a purpose of getting a degree or diploma.  The scholarship must be used to pay for tuition, books, lab fees, and related fees. If the total, scholarship received was more than the tuition paid or financed, a portion of it may be taxable and automatically disqualifies the student to claim the credit. 

To be eligible for AOTC,:

1. You must be enrolled in qualified university or college to get  a degree or diploma.
2. Enrolled at least half time for at least one academic period beginning in the tax year.
3. Not a graduate student

[Hal_Al]

@moveverk 

Your situation is not clear. Particularly what does "My student did not have expenses for spring 2021" have to do with it?

That said, you are correct, as long as you paid more than $ 4000 in qualified education expenses, you qualify for the credit. 

The 1098-T is only an informational document. The numbers on it are not required to be entered onto your tax return. However receipt of a 1098-T frequently means you are either eligible for a tuition credit or deduction or possibly your student has taxable scholarship income. 

If you claim the tuition credit, you do need to report that you got one or that you qualify for an exception (the TurboTax interview will handle this)

You claim the tuition credit, or report scholarship income, based on your own financial records, not the 1098-T. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid.  You will also reach a screen that allows you to adjust the scholarship amount for "amounts not awarded for 2020 expenses".

There is even a tax “loop hole” available, if you did not pay the full $4000. The student reports all his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), 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 1. 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.