There is a specific line on Schedule 1 for prizes and awards, line 8i.
Which box of the 1099-MISC is the $500 prize in? It should be in box 3. If it's in box 2, which is royalties, that's a mistake and you should ask the payer to give you a corrected 1099-MISC. If it's in box 3, but you entered it in box 2 in TurboTax, that's your mistake. Go back and enter it in box 3. Then you will have other options, one of which is "This was prize winnings." When you select that option you won't get any of the other questions that MinhT1 mentioned, and TurboTax will put the prize in the correct place on Schedule 1 line 8i.
