1098-T

[user17748232765]

Box 1 is greater than box 5 but TurboTax is treating it as income. No matter what I've tried it continues to add the full scholarship amount to taxable. I was only enrolled in one last class. I am trying to claim the lifetime learning credit as I've already claimed the AOC for the first 4 years of college. How do I get it to stop taxing the scholarship that is close to $1,500 LESS than box 1. This is on turbotax do it yourself premium online. NOT the free version as it won't let you use free version unless you only have a W-2.  Extremely frustrated with this program! 

[Hal_Al]

If box 1 is $1500 more than box 5, you should be getting $300 Lifetime learning credit (LLC), $1500 x 20% = $300.  If you're getting more than $300, TT has shifted some (or all) of the scholarship to being taxable to free up more tuition for the LLC.   It's unusual that TT would do that, but not impossible.  Depending on your tax bracket, that may be a good thing.  If you said, in the interview, that some of the scholarship was used for room & board (R&B), that would make that amount taxable. R&B are not qualified expenses for a tax free scholarship. 

You could try deleting the 1098-T and re-entering it.