Q. It sounds like I need to put part of the scholarship on her income tax form and part on mine correct?
A. No. All of the taxable scholarship goes on her return. You only enter the 1098-T to claim the AOC. The simple way to do that is enter a 1098-T with $4000 inbox 1 and box 5 blank. You are allowed to do that. For an explanation, see the "Five points of the 1098-T" link.
Q. Do we put the overage amount plus the $4000 for AOC on her taxes so that I can claim the AOC?
A. Yes.
Q. She had a small job and earned $6000 and she already filed her taxes to get her refund. Does she need to file an amended tax return (adjustment)?
A. Technically no. But you want to anyway just to document all this. The reason she doesn't need to file an amendment is that the $6000 wages + $4000 + $1853 excess scholarship = $11,853 which is less than the $15,750 filing requirement. She will not owe any tax or have to give back any of her refund.
