Q. $16,950 of the scholarship money was issued strictly for tuition use only. Would that change things here?
A. Yes. $18,840 - 16,950 = $1890 of the tuition can be used to claim the American Opportunity credit (AOTC). $1890 + $514 of other expenses = $2404 of net qualified expenses. That is still enough to get you $2101 of the maximum $2500 AOTC.
