You can manipulate the information on the 1098-T so that your son gets $$2,500 of income but you get $2,500 of expenses for education credit which would outweigh his tax liability.
Remember that the 1098-T is an informational form so you can
a report values that differ from those that you see on the form. In the student’s return in the 1098-T form in the program enter $2,500 in Box 1 which represents total qualified education expenses. In Box 5 enter $5,000 which accounts for the increase in the student’s taxable scholarship amount. Look on line 8 of her 1040 and you should see the 2500 of taxable income. Be sure that you checked the box on his. return saying that someone else will claim him.
Now on your return in the education credit section just enter 2500 as expenses. You don’t have to do anything else and you should see your credit. Note that on his return there will be Kiddie tax which needs information from your return to complete.
