Education

Hello @Hal_Al  and Thank you for your time.  Here are the answers to your bulleted questions and looking forward to more specific guidance - THANK YOU.

• Are you the student or parent? I am the parent
• Is the student the parent's dependent? Yes
• Box 1 of the 1098-T: $3,404
• box 5 of the 1098-T: $2,250
• Any other scholarships not shown in box 5? Yes, $1,584 (I don't know why they are not showing it in 1098-T because all scholarships and state grants came from the school and applied to the student's account, and not from other outside sources)
• Does box 5 include any of the 529/ESA plan payments (it should not)? No
• Is any of the Scholarship restricted; i.e. it must be used for tuition? Not that I am aware of
  
• Box 1 of the 1099-Q: $13,300
• Box 2 of the 1099-Q: $ 5,472
• Who’s name and SS# are on the 1099-Q, parent or student (who’s the “recipient”)? Student
• Room & board paid. If student lives off campus, what is school's R&B charge: Lives ON campus, $7,262
• Other qualified expenses not included in box 1 of the 1098-T, e.g. books & computers: $6,139
• How much taxable income does the student have, from what sources: $5,961 from W2
• Are you trying to claim the tuition credit (are you eligible)? Yes and Yes, looks like I get $1000 AOTC.
• Is the student an undergrad or grad student? Undergrad

When I try entering education expenses in student's tax return, TT warns that she is considered a dependent on someone else's return (mine).  I think this is the double-dipping warning?

On the scholarship reporting discrepancy (the $1,584), TT asks "Was any of the scholarship income not designated to pay 2022 education expenses?"  This scholarship amount showed up on her student account in December.  So it is possible it was meant for 2023, however since her account was fully paid, they sent me a refund, so technically they were all applied in 2022 (UNLESS, unless they applied it to the Jan 2023 Room & Board payment that I had to pay in Dec 2022).  So I don't know if I should answer No to the question (leading to increased student taxable income of $1,782), or answer Yes and enter the $1,584 scholarship which reduces the student's taxable income to $1,130.  I am concerned about the ramification of answering yes because I don't know what it does for the 2023 tax year.