Helping a friend prepare 2024 tax return for a graduate student that has seen this same problem. Clearly NOT eligible for the Lifetime Learning Credit as all tuition and other qualified expenses are paid by a grant (so tax free). Student also has a fellowship which does need to be reported and is taxable (non-qualified expenses). Using the 1098-T (which I have confirmed as correctly prepared by the university), TurboTax makes a mess of things. I suppose one could skip the 1098-T entry (delete if you already tried to do it) and just enter the non-qualified fellowship info. You can also "hack" around this by making the adjustment in the "not paid that year" in the scholarship dialogue of TurboTax, which is true, but all of the text around that really speaks to awards that span from the tax year into the future. So this is still a problem, it really wastes time, and its likely handing out LLC to students on generous grants that just assume TurboTax does not need to be second guessed. Only fix I found that works is to prepare tax using another on-line tool ... I have tried another one to compare and it handles the situation perfectly.
