The following is the method used to do the Form 1098-T calculation:
The Form 1098-T Box 1 will reflect the total amount of tuition that was paid. If Box 1 and 5 have the same amount it means that none of the scholarship is taxable.
If Box 5 exceeds Box 1 it indicates that you will do the math to subtract the difference and report it on your tax return.
If Box 5 is less than Box 1 then it means that you may qualify for an education credit.