Education credits can be complicated because it is your choice, claim the AOTC or allocate the scholarship which will post in 2025 to the 2024 tuition.
The American Opportunity Tax Credit maxes out with 4,000 expenses.
Your 1098-T shows 6,000 excess (18,000 - 16,000)
If you have 1,800 in additional expenses, such as books and supplies, you can do both, claim the full credit and also report the 2025 scholarship (meaning you won't have to claim the scholarship next year) (6,000 - 3,800 = 2,200 4,000 - 2,200 = 1800)
You can do it either way. Make your decision based on what you think you'll have in expenses next year, will you have enough expenses to absorb the additional 3,800 in scholarships or should you report it for 2024?
Even if you take the credit for tax year 2024 and have excess scholarship for 2025, usually the credit is more valuable than the tax the student may need to pay on the scholarship income.
IRS Pub 970
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