Simple answer yes. Since you did not use all 4 of the times he is allowed to claim that credit, he can still use it since this was his last year of undergraduate education. The 3 months is not a limitation, as long as he was at least half time. It is also assumed he supported himself by working, in 2017, or was over age 23.
There will have to be some coordination between the AOC and the 529 plan best explained by example.
Total qualified expenses
(including room & board) less amounts paid by scholarship less amounts used
to claim the Tuition credit equals the amount you can use to claim the earnings
exclusion on the 1099-Q.
Example:
$10,000 in educational expenses(including
room & board)
-$3000 paid by tax free scholarship
-$4000
used to claim the American Opportunity
credit
=$3000 Can be used against the 1099-Q*
Box
1
of the 1099-Q is $5000
Box
2
is $600
3000/5000=60% of the
earnings are tax free
60%x600= $360
You have $240 of taxable
income (600-360)
*If the 1099-Q was in your name, rather than the student's name. The math is still the same; it's just that the $240 (in the example) would go on your return, instead of his.
For 529 plans, there is an “owner” (usually the parent), and a “beneficiary”
(usually the student dependent). The "recipient" of the distribution
can be either the owner or the beneficiary depending on who the money was sent
to. When the money goes directly from the Qualified
Tuition Plan (QTP) to the school, the student is the
"recipient". The distribution will be reported on IRS form
1099-Q.
The 1099-Q gets reported on the recipient's return.** The recipient's name & SS# will
be on the 1099-Q.
