You do not need to attach the 1098-T.
The parent first reports the 1098-T and all expenses. if you have additional expenses than what is reported on the 1098-T you can apply those expenses to the scholarship, making the students taxable income less, or take the credit. That option is up to you.
Also check the students school account records to be sure that you are getting full credit for what was paid to the school. Often schools bill in December for classes that start the next year. If the school bills in one year, but the scholarship posts the next year, the 1098-T will erroneously make it look as if you received more scholarship than expense.
After you, the parent, report the 1098-T and all expenses, the TurboTax program will tell you how much to report on the student's return and how to do that.
The Form 8863 will be part of the parents return only. The 1098-T is not attached to the return, but should be kept with your tax file.
To report the scholarship as income on the student's return, please follow the instructions below. The income will be reported as earned income on 1040 line 7 or 1040A line 7 or 1040EZ line 1.
Sign into your account
Take me to my return
Pick up where I left off
Click open the search box
Type education expenses into the search box
Click "Jump to education expenses"
OR
Click Federal Taxes
Click Deductions & Credits
Scroll down to "Education" Show more
"Expenses and Scholarships (Form 1098-T)" Start
NEXT
You will need to walk through interview screens.
Answer "No" to getting a 1098-T since the student does not report this form.
Do not report any payments billed or paid.
When you get to the screen that asks "Did You Receive a Scholarship or Grant...?" Answer "Yes" and a drop down will open.
Enter the amount.
(see screen shots below)
The amount of the scholarship will be added to line 7 with
a SCH note.
