If Box 5, of the 1098-T, is $11,000 larger than Box 1, then the student has $11,000 of taxable income. TurboTax will put the $11,000 on line 8r (taxable scholarship) of Schedule 1. The taxable amount can be reduced if you are able to enter other qualifying expenses (books and a computer, typically). Room and board are not qualifying expenses for tax free scholarship.
