I received a 1098T form in the mail stating scholarships and grants totalling $2,098.00. If I ammendment my tax form will that raise my refund?

potusn2028,

Scholarship and grant money shown on your 1098-T does not give you any reduction in taxes.  Indeed, it could increase your taxes.  The reason is that they are considered to be paying some or all of the qualified educational expenses that appeared in Box 1 of that form.  This leads to two possible situation where you would owe the IRS:

(1) If the scholarship/grant value is less than or equal to Box 1, then you must subtract it from the value in Box 1 and the remainder is the only piece of qualified educational expenses that can be used to claim any educational tax credit such as the American Opportunity Credit or the Lifetime Learning Credit.  So, if the original Box1 was used to calculate an educational credit, that return needs to be amended to recalculate the credit and return the excess refund to the IRS.

(2) If the scholarship/grant value is greater than Box 1, the excess is additional income to you reported as scholarship income (a specific income category buried a level or two deep in the income screen).  In this case, that return needs to be amended to include the additional taxable income and to wipe out any previously claimed educational credit.

That said, you should first add to the Box 1 amount any out-of-pocket expenses you had for course materials such as books.  Those are also qualified educational expenses.  Use this updated pseudo-Box 1 value in its place.

There is a second twist as well.  With certain scholarships, such as those like federal Pell Grants that are unrestricted as to what expenses they pay, it can be beneficial to declare even more of the scholarship as taxable income so that a portion of Box 1 remains unpaid by scholarship/grant and can then be used for claiming an educational tax credit.  For the American Opportunity Credit, as much as $4,000 of such freed up Box 1 would likely be a win.  Certainly the first $2,000 would for sure.  For the Lifetime Learning Credit, the optimal point is often a matter of trial and error as the credit is only 20% of the expenses and one must factor in any state income tax on the extra income.