I was a full time law school student in 2024, I received 50,000 in scholarship but it went toward my 100,000 tuition bill. Why am I being taxed on the 50,000?

[Hal_Al]

Q. Why am I being taxed on the 50,000?

A. You, most likely,  entered something wrong.* 

Scholarships that pay for qualified educational expenses (QEE - tuition, fees, books and other course materials) is tax free.  Scholarship amounts that exceed QEE is taxable income, on the student’s tax return. Room & board are not QEE.

If box 5 of the 1098-T exceeds box 1, TurboTax (TT) will treat the difference as taxable income, unless you enter additional QEE at books and other expenses.

*One possibility is mismatched years.  A common problem is when the school posts a full years' scholarship in box 5 of the 1098-T but only the fall semester tuition in box 1. You have to make an adjustment when you enter the 1098-T.