Resident assistant pay as a scholarship on 1098T

[txswilliams89]

My daughter is a full time student as has a job as a resident assistant at her university, where they "give" her room and board in exchange for her time spent on her job.  She is required to work so many hours a week, as well as weekends, as well as time spent in training and planning and implementing resident programs.  All this to say she is "actively" earning this income.  She is required to live in the dorm and eat so many of her meals during the week on campus, as well as have so many interactions with her residents per semester.  The university has issued her a 1098-t which in box one shows an amount billed for tuition and fees and in box 5 shows the amount of her room and board as well as two academic scholarships she was awarded.  In addition to this she has a student loan to cover the remainder of her tuition and fees.  

After putting the 1098-t into TT I have come to the conclusion, that regardless of the fact that she is required to live in the dorm for the position, the value of the amount for room and board is considered taxable income to her because of the way the university is reporting it.   TT has included the value of room and board and added it to her W-2 from her other campus job, but it also added the value of her scholarship for room and board and deemed it  "unearned income" (as stated above, this could not be further from the truth) and has included it on form 8615 where it is now asking for my taxable income so it can be taxed at a higher rate. 

Is this all correct?  The school will not give any information on why they consider it scholarship income vs W-2 income, even though they are employees of the university.  I'm not sure why the income would be taxable since her living in the dorm is a condition of employment.   I cannot find any publication which SPECIFICALLY speaks to this type of situation... the fact that it is a STUDENT and the job requirement of living and eating on the employers location for the benefit of the employer.  This is more like an employee living on a cruise ship to do the job, rather than a professor who can live where they want but gets housing paid for. 

Any suggestions where I can find the exact directions for this would be appreciated. 

[Hal_Al]

[EDITED)

Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the  $12,400 filing requirement and the dependent standard deduction calculation (earned income + $350)..  It is not earned income for the kiddie tax other purposes (EIC. IRA contributions or additional child tax credit).

Taxable scholarship goes on line 1 of form 1040 with wage earned income.  TT can handle the dual treatment of the income.

[txswilliams89]

Ok, yes, it is on line one and next to line one is a note of SCH and the amount of her room and board that is being taxed as scholarship.  But TT is filling out form 8615 and is asking for my taxable income.  Maybe I've entered something incorrectly to set that form off? 

Why does resident advisor housing and meal allowance not fall under IRC119(d)?  In their job description they are clearly referred to as university employees, and the condition of employment is based on the RA's living in the dorm on campus and eating in the cafeteria.  What makes their pay scholarship and not wages?  It seems to me they fit the three points under this IRC.  

[Hal_Al]

Apparently, I was wrong.  Although earned income for the filing threshold and standard deduction, scholarship is now unearned income for purposes of the Kiddie tax.  Reference: https://www.thetaxadviser.com/issues/2019/jul/kiddie-tax-unearned-income-scholarships.html

For most people, that's not a problem because the standard deduction covers most of it.

As to the 2nd issue; I've seen that discussion here before.  The basic answer was: an RA is more student than employee.