Q. So is it still possible to use "tax loop hole" method to claim full American Opportunity credit(AOC)?
A. Yes.
The AOC is 100% of the first $2000 and 25% of the next $2000. That still beats the 22% tax rate the student will pay on the extra $4000 of scholarship income.
Although you may want to just have him claim $2000, instead of $4000.
