Yes, you will want to include the reimbursement. Since the reimbursement is applied to last year's payments, applying it correctly will allow you to take the full amount of credit you are entitled to this year without having to pay any credit back next year. You don't actually need to reduce the box 1 amount of the 1098-T, but rather input the reimbursement on the screen that follows the 1098-T entry screen. Here's a screenshot of what to look for:
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