Yes, because there are options when it comes to education credits, the program might allocate up to $10,000 of expenses towards a credit. Once that happens, it's tricky to "re-allocate" the expenses to the scholarship.
If you are working with TurboTax Desktop, go to forms and look at Form 8863.
If you're using TurboTax Online, try the steps below:
Please go back to the "Education" section. (Federal, Deductions & Credits, Scroll down to Education).
Get to the "Education Information" section (the last option on the "Here's Your Education Summary" screen).
Re-answer the interview questions until you get to the last screen. This screen should show how much of the education expenses are being allocated to a credit.
If you are eligible for the American Opportunity Tax Credit (usually the more valuable credit), the credit maxes out at 4,000 expenses, so you wouldn't want to allocate more than that.
If you are taking the Lifetime Learner's Credit, the credit maxes out with 10,000 expenses.
If you want all the expenses to be applied to the scholarships/grants/1099-Q distribution, change the amount to 0.
Type letme into the search box to see which credits you are eligible for and change the credit you claim if desired.
Once you click "Maximize My Education Tax Break" the program determines the best allocation, so don't click this if you want something different.
You can always go back to this allocation screen and change the allocation amount.
@nodog2021
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
