My daughter receives $8,500 (1098 T) scholarship from her college. Should we apply it toward tuition or room and board?

[mjbacha]

I think I applied it to room and board and now my daughter owes $550 in taxes from $ 4219.48 earned income.  Somehow, the $8500 was added to her earned income and now her taxable income is $12,719.48    How do I correct this?

[Marketstar]

Can you tell me how much her educational expenses are other than room and board.?

[Marketstar · Accepted solution]

Room and board are not deductible, Qualified Educational Expenses

After completing your educational entries, TurboTax will automatically apply the scholarship to her qualified educational expenses (including tuition) to compute taxable income or an educational deduction or credit