Q. Wait, doesn't the amended return just replace the original return values for box 1 and 5?
A. Not exactly. What you enter is not sent to the IRS. TurboTax uses those numbers to recalculate the credit. On form 8863, $802 is changed to $4000.
Alternatively (to entering $4000 & $0), you could enter $11862 in box 1 and $7862 in box 5. But do not enter any other numbers, either way. On form 8863, $802 is changed to $4000, either way. The AOC is changed from $802 to $2500.
Q. They received all the taxes back on their return and made way less than 14600 even with adding 3198.
A. As previously stated, you do need to file amended returns for them. This assumes they have is no unearned income (interest , dividends, 1099-Misc) over $400 ($450 for 2024).
