For 529 plans, there is an “owner” (usually the parent), and a “beneficiary” (usually the student dependent). If kid A is the beneficiary of the 529 plan, any money used for kid B's education is a non qualified distribution, unless the beneficiary was officially changed prior to distributing the last $5000.
Be advised that kid A may not be eligible for all the AOTC. 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. . Reference: Line 7 instructions for form 8863. https://www.irs.gov/instructions/i8863
@JKCPA said " I read there is a limit based on the index the school provides - is this the student room fee?
Simple answer: Yes, you can use that amount.
