Since you are a grad student, you will be eligible for a Lifetime Learning Credit. Your salary is taxable, your remission is not as long as it was not used for room & board.
You will be entering the 1098T as it is written. Here are some questions you will want to answer:
Was Any of XXXX's Financial Aid Already Included in Income? NO (your W2 is really a salary)
Did XXX Receive a Scholarship or Grant in 2018? YES
Did XXX's Aid Include Amounts Not Awarded for 2018 Expenses? NO
Did XXX Pay for Room and Board with a Scholarship or Grant? You will have to answer this but you should know:
A scholarship or fellowship is tax free only if:
• you are a candidate for a degree at an eligible educational institution and
• you use the scholarship to pay qualified education expenses.
Expenses that Don't Qualify
Qualified education expenses do not include the cost of:
• Room and board.
