Only the amount over $5,250 COULD be taxable income. If the school is only reporting the expenses over and above 5250 of your award, only report the difference as scholarship received.
If the 1098-T reports 6907.50 in box 5, and box 1 only reports 4250, you'll need to adjust for Box 1 and add the 5,250.
Do this by clicking the "What if this is not what I paid?" link under box 1 of the 1098-T screen.
Be sure to keep good records, such as your school account statement and/or award letter with your tax file.
CLICK
HERE for IRS Pub 970 Tax Benefits for Education
