TurboTax doesn't automatically include the scholarships from box 5 of Form 1098-T on Form M1PR-AI, because the scholarship may be taxable or nontaxable.
If you used the amount of the scholarship to reduce the tuition available for credit, that is a nontaxable scholarship. You can elect to treat the scholarship as taxable and increase the amount of tuition available for education credits.
On the federal tax return, if the scholarship is taxable, the income is reported by the student. If it is used to reduce the tuition available for credit (nontaxable), it is reported on the parent's return, unless the student is not a dependent.
The Minnesota instructions are not completely clear, but I think it more likely than not, they would look at this issue the same way as the IRS does.
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