Q. I need to know where to report this otherwise taxable income when it was spent on tax free expenses such as books and supplies?
A. Enter the 1098-T. A follow up question will ask "Did you pay for Books or Materials to attend school". Answer yes. Fill in the amount in the drop down box that applies, "Books and Materials Required to be purchased from the school" or "not required to be purchased from the school". That will keep the $600 from being taxable.
