Yes. If you are preparing form 1040 by hand, do this: Enter $5916 on line 1 (the $700 W-2 + the $5216 taxable scholarship). On the line to the left of line 1, enter SCH 5216.
If you're using TurboTax (TT), TT will do that for you, but you must enter the scholarship income in the 1098-T/education expenses section, not the income section. The simple way is to enter the 1098-T with 0 in box 1 and $5216 in box 5.
