You said her scholarship is $45,000, but I don't see where you said how much is in boxes 1 & 5 of the 1098-T. Also we need to know her book expense and other course materials, including a computer if she purchased one in 2024.
Q. The benefit is to save $2500 of the $8000?
A. No. The tax on the scholarship remains , unless the numbers I just asked for change things. I think they do. I don't see where the $8000 came from.
Q. If she adds to her income per your suggestion (to enable the parents to get nearer the $2500), her tax will increase?
A. Yes. She will have $4000 more taxable scholarship. So she will pay $880 more tax (4000 x 22% her parent's assumed rate) in order to get her parents $2500. And it appears that you can repeat that for the last 3 years.
