Deductions & credits

For your return:

Enter the 1098-T as is

Box 1 $28,180 

Box 5 $13,600

This will take the $4,000 and use it towards the AOTC. You have a paper trail if the IRS asks from this thread and your paperwork.

For the student return:

To get $3781 or less there are two ways. The correct method is to add the 1099-Q before the 1098-T but the program wants to reserve $10,000 for Lifetime Credit so that is not the best method.

Enter the 1098-T

Continue entering

Education summary, select Scholarships/ Grants

Other aid, yes

Enter the amount needed for the correct taxable income.

$18,361 gives you $3,781 taxable. This can be seen on sch 1 under Scholarship