On my 1098-T, the amount in box 5 is greater than that in box 2, but the overage did not come to me. Am I liable for taxes for that overage as TurboTax seems to think I am?

I believe the 1098-T is reporting the tuition/fees expenses that my fellowship sets aside money for that are never intended to go to the student. The rest of the fellowship is not reflected on the 1098-T and came directly to me, but I received no W2 or other forms for that living stipend.
    You do not need to enter the 1098t since you are not eligible for any education credit or deduction
    You do have scholarship/fellowship income for amounts paid to you or on your behalf for nonqualifying expenses like room and board or health fees.

    Where do I enter scholarship income?

    Taxable income from scholarships, fellowships, or grants are entered in the Income section of the interview, under the topic Less Common Income. Follow these directions to jump directly to the entry screen.

    In online versions:

    Click the Tools button in the upper right corner,
    Then select Topics & Forms,
    In the search window, type scholar in the field, select either scholarship topic from the list, and click Go,
    You will come to the "Taxable Scholarships and Fellowships" screen, follow prompts.

    Deduct any qualified expenses from the total fellowship (box 5 plus amounts not in box 5) to get the taxable amount.

    Qualified education expenses. For purposes of tax-free scholarships and fellowships, these are expenses for:
    Tuition and fees required to enroll at or attend an eligible educational institution, and

    Course-related expenses, such as fees, books, supplies, and equipment that are required for the courses at the eligible educational institution. These items must be required of all students in your course of instruction.

    However, in order for these to be qualified education expenses, the terms of the scholarship or fellowship cannot require that it be used for other purposes, such as room and board, or specify that it cannot be used for tuition or course-related expenses.
    Expenses that do not qualify. Qualified education expenses do not include the cost of:
    Room and board,



    Clerical help, or

    Equipment and other expenses that are not required for enrollment in or attendance at an eligible educational institution.

    This is true even if the fee must be paid to the institution as a condition of enrollment or attendance. Scholarship or fellowship amounts used to pay these costs are taxable.
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