Q. I am thinking since my son had a job he could file as independent and hopefully can get the educational credit himself?
A. No, that is not allowed. Congress wrote the law for parents putting kids thru school. See next paragraph. Furthermore, you can't just claim to be independent. You must meet the rules. A student with those numbers can't be independent.
There's a new urban myth among college students that says they can get a $1000 from the government just for filing a tax form. For most of them, they simply aren't eligible. A full time unmarried student, under age 24, even if you don't qualify as a dependent, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. It is usually best if the parent claims that credit.
You cannot claim the (up to) $1000 refundable credit if you are, or can be, claimed as a dependent by someone else.
Reference: Line 7 instructions for form 8863.
https://www.irs.gov/instructions/i8863#en_US_2024_publink53002gd0e674
That said, to answer your question: putting 0 in box 1 only works when the parent is claiming the credit. In that case, the student is only reporting taxable scholarship income. For a student (typically over 23), who can claim a tuition credit, it can be done easily in the interview. When asked how much of the scholarship was use for room and board, increase the amount by $4000. In your example, he enters the 1098-T as is ($6500 in box 1 and $28,500 in box 5). $22,000 (28500- 6500) would normally be taxable. At the how much of the scholarship was use for room and board, enter $26,000 (22,000 + 4000). Note the wording at that screen “or other expenses”. You didn’t have to literally use that much scholarship for R&B. That leaves $2500 for tuition. 6500 tuition -2500 paid by tax free scholarship = $4000 of tuition can be used to claim the ed credit. Id you has other qualified expenses (books and computer), you would adjust the numbers for that.
