The federal taxes the room and board portion of the payment so they were correct to tell you to subtract the tuition expenses. If you received a 1098-T, the program will do the work using boxes 1 and 5 to determine the taxable amount. You will enter the room and board portion of the scholarship funds during the questions.
If you do not have a 1098-T, you will need to enter the taxable portion. Scholarship income entry
1. Go to the federal income section
2. Scroll to the bottom
3. Miscellaneous Income, 1099-A, 1099-C, Start
4. Other income not already reported on a W2 or 1099, Start
5. Other wages? Yes
6. Household employee? Continue
7. Sick pay, continue, Medicaid, continue
8. Other Earned Income? Select Yes, continue
9. Source of income? Select Other
10. Enter description - Scholarship, enter your taxable amount
11. Continue
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