All income from all sources is income. Weather it's reportable or not, and taxable or not, is another story.
Scholarships and Grants are reportable income, but they are not EARNED income. That can matter for some things, such as the EIC. Scholarships and Grants are treated as taxable income *initially*. But their taxability is offset by the qualified education expenses they are used to pay for.
When working the support issue, scholarships and grants, along with 529 funds reported on a 1099-Q do not count as income for the self-support. In other words, if your sole source of income for the year was scholarships and grants, and you had enough left over after paying qualified expenses to support yourself for the year, then that income does not count for you supporting yourself because you did not physically earn it. So when asked if you provided more than 50% of your own support, the only correct answer to that question would be NO.
