@AmyC said "If you did not claim the tuition paid in December on last year's return, then you can use it now."
I think she is suggesting the student can claim a tuition credit for 2023 and I agree. But, be aware you can only claim the American Opportunity Credit (AOC) 4 times as an undergraduate. Since graduation year is usually the 5th calendar year, the parents may have already claimed the AOC the maximum 4 times.
The alternate Lifetime Learning credit (LLC) is not as generous as the AOC and the scholarship loop hole technique* may not pay off with the LLC.
* There is a tax “loop hole” available. The student reports all his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), as income on his return. That way, the parents (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship. You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.
Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.
