Q. I'm finishing my child's returns now- do I use the same amount on hers? I would just put the $4000 in her box so that she is taxed on that amount correct?
A. No. How to enter was explained above, in the same answer that told you to enter only $4000.
Enter the 1098-T, exactly as received, on the student's return. Enter book expenses separately. In his interview, you should eventually reach a screen called "Amount used to calculate education deduction or credit" Be sure the amount in that box is $4000. That will put all his excess scholarship as income on his return.
Be advised some people are saying they're not getting the "Amount used to claim the tuition deduction or credit" screen on the dependent’s . The alternate workaround is to enter $4000 less than the actual box 1 amount, when you enter the 1098-T
There's yet another (and simplest) work around. Manually calculate the taxable amount of scholarship and enter the 1098-T, on his return, with 0 in box 1 and the taxable amount (apparently $5617 in your case*) in box 5. In that case be sure the amount in the "Amount used to claim the tuition deduction or credit" box is 0.
*$14,406 in box 1
+ 600 Books etc
= 15,006 Total QEE
- 4,000 used for the credit on your return
= 11,006 Can be used for the scholarship
$16,623 Scholarship
- 11,006 adjusted QEE
= 5,617 Taxable scholarship income
