Scholarships must be claimed the year received.
Tuition can be the current year plus the first 3 months of the next year based on many schools billing near the end of the year for the next semester. Tuition is claimed when paid rather than when billed.
The AOTC is good 4 times while a student is in school during 5 tax years due to starting in the fall.
Also, you did not mention required school supplies, books, etc. Those can add up. Some schools even require a computer.
You can say the 1099-Q covered everything, no AOTC, the scholarship refund is taxable to the student. However, it sounds like you have additional tuition that should be included in box 1.
Because the 1098-T is informational, you should change the tuition amount to the actual amount paid. You have the paperwork to back you up.
With the extra tuition and expenses, you may be able to get some AOTC with the scholarship taxable to the student.
The IRS recommends you juggle numbers. It may be a game of playing on your return and your student's for the best solution.
See Pub 970 for rules.
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