Q. Do we have to add both of Box 1 & Box 5 for each of the child and treat them separate?
A. The question is not clear. You will be claiming two AOTCs, one for each student.
Q. Is the max is still $4k for two child?
A. The maximum credit is $2500 for each child, based on you entering, at least $4000 of qualified expenses for each child. After entering all the info for the first student, you will reach a screen titled "Your Education Expenses Summary". Click the "Add a student" button to begin entering the 2nd student's 1098-T and info.
A. Should I just disregard the 2nd child as Box 1 is greater than Box 5?
Q. Yes. If box 1 is bigger than box 5 by $4000 or more, you do not have to make any of his/her scholarship taxable for you to get the credit. So, just don't enter the 1098-T on his return. Of course, you do enter his 1098-T, on your return, to get the credit.
