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How can I add scholarships and grants as taxable income?

 
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2 Replies
KrisD15
Expert Alumni

How can I add scholarships and grants as taxable income?

Enter the amount under

  • Deductions & Credits
  • Education 
  • Expenses and Scholarships (Form 1098-T)

 

Continue through the interview and bypass the entry of the 1098-T 

When the program asks for additional scholarships not reported, enter the taxable amount. 

 

The taxable income will flow to Schedule 1 line 8r

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Hal_Al
Level 15

How can I add scholarships and grants as taxable income?

When box 5 of your 1098-T is more than box 1, TurboTax (TT) will automatically treat the difference as taxable income, unless you add additional expenses, like books and a computer. If you add additional scholarships, but not additional expenses, TT will also treat the additional scholarships as taxable. 

 

If you want to make more of the scholarship taxable: when asked if any was used for room and board (R&B), answer yes. Then enter the amount you want to be taxable (including the automatic amount), in the pop up box. R&B are not "qualified educational  expenses".  So, this is how you tell TT that it is taxable. Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B.  This will put it on line 8r of Schedule 1 (this line is new starting in  2022).

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