Scholarship being taxed as income in turbotax state (massachusetts)

[nikconwell]

Hi, after going through turbotax state 2024 (Massachusetts), our taxes go up after entering the scholarship information that's reported from the 1098T. The scholarship is being used for undergrad, full time student, tuition only. This is not supposed to be taxed on the state. When we went through federal we checked and the taxes did not go up after entering the scholarship information. Only on the state. Is there a problem with turbotax state 2024 for Massachusetts?

Thanks.

[Hal_Al · Accepted solution]

To verify that the scholarship was not taxed on the federal return, look at line 8r on Schedule 1. 

If taxable scholarship is there, it would automatically transfer to the state return. 

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.

[nikconwell]

Thanks very much! 8r is empty, and the amount of box 5 is not more than 1, so we should be all set. Thanks again for your help!