@akkina9 if you don't claim your son (which is your right) and if your son meets these three conditions, he is INELGIBLE for the refundable portion of AOTC and would have to qualify for AOTC as a non-refundable credit only.
1) he is under 24 and provides less than 1/2 his support AND
2) he files other than Married- Filing Joint AND
3) at least one of his parents is alive.
from what you stated, he probably meets these three conditions....
to capture the $2500 as a non-refundable credit, Line 22 of form 1040 would have to be greater than $2500 (which means his income would need to be in the $38,000 range.)
His Qualified Education Expenses (box 1) of form 1098-T would have to exceed his scholarships (box 5) by at least $4,000. Qualified expenses are needed for college: tuition, books, computer, etc. Room and Board, activity fees, etc. are NOT Qualified expenses and are ineligile for AOTC.
if you claim him and your income exceeds $90,000 ($180,000 joint), you are not eligible for AOTC.
to specifically answer your questions 1) and 2). the answer to both are "NO". You are describing 'refundable credits' and he is ineligible for those.
make sense?
