You could try deleting the 1098-T and 1099-Q and re-entering (enter the 1099-Q first).
That said, I'm gonna recommend the "workaround".
Delete the 1099-Q and 1098-T (delete the student).
Enter the 1099-Q. When asked who the student is answer: someone else not listed here (lying to TurboTax to get it to do what you want does not constitute lying to the IRS). Enter the student's name when asked. A few screens later, you'll get one simple screen to enter expenses. Press Done at the 1099-Q summary screen, to get there. Enter $11099 tuition, 11,175 R&B, $2690 other expenses. Also enter $6,666 (4000 + 2666) in the box "Tax-free assistance". This reports the earnings as taxable and claims the scholarship/Ed credit exception. You do not have to deal with the complicated “Educational expenses and Scholarships” (1098-T) section later. TT will prepare form 5329 to claim the penalty exception.
At the 1098-T screen, enter the 1098-T with $4000 in box 1 and box 5 blank (entering the 1098-T just as it is also works). This gets you the full $2500 credit.
