I would enter the scholarship amount under "Other Income" and also enter a negative amount for the offset.
In TurboTax online,
- Sign into your account, select Pick up where you left off
- To the right upper corner, in the search box, type in "other reportable income" and Enter
- Select Jump to other reportable income
- Next screen, Other Wages Received, select No to continue
- Next screen, scroll down all the way to the bottom, under Other reportable income, select Start
- Next screen, Any Other Taxable Income? select Yes to continue
- You will also enter the same amount as a negative number for the offset.
Make sure you keep record or a statement to show it's tax exempt status when IRS asks for it.
If you and spouse meet the filing requirements, you would need to file a Form 1040. Click here: https://turbotax.intuit.com/tax-tips/irs-tax-return/do-you-have-to-file-an-income-tax-return/L2hxskb...
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