I have had the same situation with box 5 being a greater amount than box 1 due to a scholarship that included tuition and a stipend for books. I found that If you enter your 1098T amounts in turbo tax it will first calculate that you owe tax on the difference between the 2 numbers, because it has identified that you received more than you paid. If you continue to follow the prompts it will then ask you if you used this money for books/related materials. If the difference between the amount in box 5 minus the amount in box 1 is a positive number and you spent all of this on books/materials, and you kept record of this, then you should not be taxed on this "extra" amount. It will be offset when you enter your expenses and your tax due should decrease again to what it was before you input the 1098T amounts. For some people, if your expenses are even greater than that difference, you could qualify for a credit. If, however, you had no books or materials costs, then that amount difference will be taxable. Any amount you spent on room and board are not considered expenses you add here. However, if you withdrew money from a 529 plan, you can use that money for room and board expense. Hope that helps!
