Q.Is there a way to allocate the expenses to the scholarship so we don't have to mess with redoing his return?
A. Yes. On your return enter the 1098-T with only $842 in box 1 (2631 -1789 =842) and box 5 blank.
Q. Is that because TurboTax figures it already gave me the notification so doesn't need to do it again or was it a fluke the first time? Or what's going on here?
A. It depends on how the info is entered. TT may have given you the full credit without noting the need to report the scholarship
How much are you getting for the AOC (line 29 + line 20* on form 1040)? How much other income did he have? The family usually come out best Filing an amended return for him to report the scholarship income. Depending on the numbers, an amended return may not be necessary.
*Line 20 may include other credits (see line 3 of schedule 3 for the tuition credit)
