Q. Do I record this somewhere in TurboTax?
A. No. At least, not based on the statement, alone. Maybe, depending on how else the stipend was reported to you. Did it also show up on the 1098-T, a W-2 or a 1099?
It appears that the school is treating it as scholarship. Scholarships that pay for qualified expenses (tuition, fees and books) are tax free and do not need to be reported, for taxes.
On the other hand, you have the option of reporting the stipend as income, if you need to "free up" some tuition so that you (or more likely, your parents) can claim the tuition credit. See example below the line.
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There is a tax “loop hole” available to claim an education credit, for the parents of students on scholarship. The student reports all his scholarship, up to the amount needed to claim the American Opportunity Credit (AOC), as income on his return. That way, the parents (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship. You cannot do this if the conditions of the grant are that it be used to pay for qualified expenses.
Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.
Books and computers are also qualifying expenses for the AOC. So, extending the example, the student had another $1000 in expenses for those course materials, paid out of pocket. She would only need to report $5000 of taxable scholarship income, instead of $6000.
