The TurboTax program can only compute from the forms that are entered into the program.
Whatever is in Box 5 on a 1098-T should also be included in Box 1 of the same 1098-T.
Box 1 is not what YOU paid to the school, it is payment made to the school in that tax year. If the scholarship was internal, the amount should be in Box 5 AND Box 1 if it posted that year. That is the purpose of the 1098-T, to tell tax software what was paid in that tax year.
It sounds like the school may have reported the 1098-T incorrectly.
You can adjust for this in the TurboTax program, but I suggest you keep a copy of the student's school account statement with your tax file to prove what was paid and when.
Once you are sure of the numbers, you can click "This is not what I paid" under Box 1 on the 1098-T entry screen and enter the proper amount. Box 1 should be reporting EVERYTHING the school received in 2020 for that student for paying tuition and fees. This would include scholarships.
If a scholarship is posted on a 1098-T, but is for a different tax year, enter that amount on the "Aid for a different year" screen.
If the 1099-Q was used entirely for room and board, the 1099-Q and the amount of room and board need not be entered.
They would cancel one-another out.
IRS Pub 970
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