Entering scholarship as income

[SeanE1]

The IRS views any excess of scholarship proceeds greater than qualified education expenses as taxable income.  When you put the information from your 1098-T into Turbotax, your program will take the excess and move it to, depending on which tax form you use, line 1 of Form 1040EZ, line 7 on Form 1040A or line 7 of Form 1040. You will see the letters SCH (Scholarship) next to your income amount on that line.  Here are the steps to include your 1098-T on your tax return:

• Open up your tax return

• Select Federal Taxes at the top of your screen

• Select Deductions & Credits at the top of the next page

• Scroll down the page until you get to the Education section 

• Click Start/Revisit to the right of Education

• Click Start on the right of Expenses and Scholarships (Form 1098-T)

• Go through this section’s interview questions and you will be able to enter the information from the 1098-T.