That amount is reportable on your daughter's return. It cannot be offset by room & board. It can however, be offset by books, supplies, computer, etc.
You do not need to file a tax return for your daughter- and
there will be no benefit to doing so if her income is below $6300. The threshold can be lower when a dependent
has unearned income, but taxable scholarships are not considered unearned
income for dependent filing requirement purposes.
The taxable
scholarship would never go on your return,
even if he's your dependent. Fortunately, it doesn't need to go on any return
because of the amount.
While you certainly want to
claim him as a dependent if he does not provide 1/2 of his own support (and you
meet all the other requirements), you won't get a credit or deduction for education. If she has a taxable scholarship, that means you
don't have any eligible education expenses. You cannot get a credit when
tuition and books are fully paid for with tax-free money. So, if you go through
the process of entering the 1098-T, Turbo Tax is not going to produce anything
from it. It's essentially a dead end.
You don't technically file a
1098-T. You enter the data on it to produce results on your return. You are
welcome to go through the motions, but the net result is that it would produce
no tax benefits.
