Here's some additional information you may find helpful in the future, to assist with keeping things straight.
Colleges work in academic years, while the IRS works in calendar years. So the reality is, it takes a student five calendar years to get that four year degree. With that said:
- Scholarships, grants and 529 distributions are reported in the tax year they are received. It *does* *not* *matter* what tax year the money was received *for*.
- Qualified education expenses (tuition, books, lab fees) and the other allowed expenses of room and board are claimed in the tax year they are paid. It "does" "not" "matter" what year is paid *for*.
Overall, it all "works out in the wash", literally! One thing I will point out through, is for the student's senior year of college. Pay for that last semester of the senior year, "BEFORE" the first semester ends. That's because the first semester of the senior year will be the 4th calendar year, and the last year you can claim the AOC, assuming you claimed it in the prior three calendar years.
If you wait until after Jan 1 when the 2nd semester of the senior year begins, you will not be able to claim the AOC (and possibly a few other credits I can't recall) if you claimed them already in the prior 4 calendar years.
