Yes, you CAN do it that way.
You previously said "If it is taxed on his return, it would be pretty much a wash whether he does or doesn't take the non-refundable AOTC once we factor in the loss of the $500 dependent credit"
That depends on the numbers. The AOTC is 100% of the first $2000, even when it's not refundable. The taxable portion of a 529 distribution is unearned income. As such, it is subject to the "Kiddie tax" and he only gets a $1300 standard deduction.
Whether there is any scholarship money or other income also affects then calculation.
