Credits vs. deductions is all clear to me. My question was why TT presumed to remove $10,000 from my 1098-T entry, when it could only use (at most) $4,000 to generate the AOC credit. The net result was that it calculated the credit, but added several thousand back to my income, and I would have paid tax on it.
When I went through the interview, TT did not ask me about diverting the money (or how much), but just did it. Maybe it would have "fixed this" if I had gone through to auto-optimize, but I got confused by the initial 10K and went hunting before going further.
