The IRS computers are not looking for 1099-MISC income on line 8r of Schedule 1. They are expecting it on line 8z. So, you want to put something on line 8z to match the 1099-MISC in the IRS system. But you don't want to be taxed on it twice. So, you enter it twice on line 8z (with the magic words "1099-MISC"). The same number, plus and minus, ends up reporting $0 on line 8z. It gets taxed, because it's on line 8r.
Q. Does this mean it is taxed but not in the. same way as "other" income?
A. Yes. "Other income" is taxed as unearned income. For most people that may not matter. But for student-dependents, it can make a difference in the amount of tax paid.
Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the $12,950 filing requirement and the dependent standard deduction calculation (earned income + $400). It is not earned income for the kiddie tax and other purposes (e.g. EIC). For grad students and post grad fellows, scholarship income is earned income ( "compensation") for IRA contributions.
