I got the second schools 1099T first:
box 1: 11,255.39
box 5: 4744.00
got 1099T from first school she no longer attends
box 1: 16,080
box 5: 34,109
Your student has $27,335 of qualified educational expenses (QEE) and $38,853 of scholarship. $4000 of the QEE was used to claim the AOC, on your tax return, leaving $23,335 covered by the scholarship. Scholarships that cover QEE are tax free. Scholarships that cover non qualified expenses (mainly room & board) are taxable. At this point, your daughter has $15,518 of taxable scholarship. Since that is more than the $13,850 filing requirement*, that must be reported on her tax return. Books and other course materials, including a required computer, are also QEE and can reduce that amount.
Q. Why is that number in box 6?
A. You'll have to ask the school that. It usually only affects the prior year tax return.**
* Scholarship income is a hybrid between earned and unearned income. It is earned income for purposes of the $13,850 filing requirement and the dependent standard deduction calculation (earned income + $400). It is not earned income for the kiddie tax and other purposes (e.g. EIC). For grad students and post grad fellows, scholarship, stipend and fellowship income is earned income ("compensation") for IRA contributions
** Box 6 of IRS Form 1098-T reports adjustments made to scholarships or grants reported on a prior year Form 1098-T that was in BOX 5. The amount reported in BOX 6 represents a reduction in scholarships or grants reported for a prior calendar year. The amount reported in BOX 6 for adjustments to scholarships or grants may affect the amount of the education credit you may claim for the prior year. See IRS Form 8863 for how to report these amounts.
