Following the instructions, at the first reply, will report the income as unearned income on line 8z of Schedule 1.
Educational scholarships and grants, that exceed qualified educational expenses, can be treated as earned income for some purposes. This can be critical for students who can be claimed as dependents or are fulltime students, under age 24 and unmarried and not orphans.
The alternate way to enter grant income, in TurboTax, is at Deductions and Credits / Education / Expenses and Scholarships. That will put it on line 1 of form 1040, as earned income, with the SCH notation.
