Q. I'd like to reconcile this problem so we can claim the American Opportunity credit (AOTC) for my son this year. Is there a way to do that?
A. Yes, you are allowed to allocate expenses, pretty much at will.
"$5,000 in Dec 2023 advanced payment for 2024 spring semester."
Tuition and other qualified expenses paid in 2023 for the first term of 2024 can be counted on your 2023 tax return. The fact that the spring 2024 tuition is not reflected on the 2023 1098-T is easily adjusted in TurboTax.
However you are not allowed to do the opposite (move the 2023 distribution to the 2024 tax return).
How much room and board (qualified expenses for a 529 distribution) do you have? Other expenses, books and a computer? Is the scholarship restricted to being used for tuition? How much other income does the student have? That alone, should get you the AOTC.
