Thank you very much for everyone's help. I am sorry for the confusions I may have caused. I did not have all the facts on hand before. I am much cleared now.
Hal_AI, you are correct about the w2 part - amount of stipend.
As for the 1098-T part, Turbotax did ask if the scholarship was reported on w2. It was not reported on the w2 so it treated as extra income. The w2 and the scholarship amount are not the same.
I got a copy of the pay stub. It has few sections. Under the Earnings section：
Stipend -PA tax exempt $$$(1)
Student fee(Nontaxable) $$$(2)
Student Tuition $$$(3)
Under Post Tax Deductions section, it lists
Student fee deduction $$$(4)
Tuition deduction$$$(5)
(4) and (5) are the same as (2) and (3). They are deducted from earnings. Last section on the pay stub is the taxable wages $$$(6) which is the same as the Stipend amount(1) in the earnings section.
Since it says "PA tax exempt" so the student is not required to file PA tax return, correct? Taxes are withheld for federal, MA state and PA LST -PITTS.
Form 1098-T is to get tax credit. Since no credit will be given to grad student so delete it. I thought 1098-T needs to be reported.
Again, thank you all for your help.
