Q. Do you have any thoughts on how the school is reporting tuition and the graduate stipend?
A. I think it's more straight forward than the long discussion implies. They treated the non tuition part of the stipend as wages and put it on the W-2. Just enter the W-2 as is.
Q. Why the taxpayer might be showing $30,000 of excess scholarship income when entering the 1098?
A. Simple answer: user error. Most likely culprit: duplication when asked if any of the scholarship was reported on a W-2 or 1099. Since poster is not eligible for a credit, just delete the 1098-T
@Opus 17 said "What I would do is enter the W-2 only and ignore/delete the 1098. Your child is not eligible for any tuition tax benefits unless they paid tuition out of their own pocket or from loans, no matter what the 1098 says."
I think that's right in this case; the tuition was paid by restricted tax free scholarship (actually [apparently] "tuition remission"), because that part was not included in box 1 of the W-2.
