1098-T Ques: Scholarship exceeded edu expenses: "taxable inc on [dependent's] tax return"

I entered this as a comment under another question, but was afraid the Tax Pro wouldn't look back at it...

Tax Pro Allison said: "When you report the 1098-T, the amounts transfer into your responsibility. You can trust TurboTax to calculate the taxable amount properly as long as it was entered exactly as shown on the form. Do not have your son claim the same form."

I also entered my dependent child's 1098-T info on my return. After entering it (again, on my return), I noticed the following "fine print" note just before I clicked "Continue" to the next screen:
"[Child's Name]'s scholarships/grants exceeds his/her education expenses which is treated as income for tax purposes. [Child's Name] will need to include $9,612 as taxable scholarship income on his or her tax return."

I'm thoroughly confused. Like @ladiebugfan, I didn't think I would pull figures from a single 1098-T for both mine and my daughter's returns. Because she's a dependent, I entered it on my taxes.

Did TT already add this amount under MY taxable income (in spite of the above message)?  I find it listed under "Part V: Education Assistance (Scholarships, Fellowships, Grants, etc.)", so should I assume (ahem!) it is calculated in my figures?

Must I amend my taxes and eliminate reference to my dependent's scholarship and then enter it under hers as if she were not my dependent?  Or do I amend my return to add this as income somewhere on MY return?

At the very least, I'm confused by the info given, both by TT and Tax Pro Allison.  I look forward to being set straight.  I hope I've made a mountain out of a mole hill!

thanks, VW
    Really you didn't need to report the 1098T if all of  the education expenses were paid by a scholarship.  (You can, and it wont hurt anything, but it won't help, either.  1098-T's are one form that is not mandatory to report non your tax return, and that rule exists for situations like this.)  Because you have no out-of pocket education expenses, neither you nor your child are eligible for any deductions or credits.  

    Your child DOES need to report it on her return because the excess in scholarship money is considered income fro her (she's the one who gets the check for the balance), not you.
    • @Jason said "Your child DOES need to report it..."  I submitted it under her number.  It was her only income for the year.  The state (AR) rejected efile three times.  I finally printed it, had her sign it, and wrote a note to the state.  I sent the return, the note, and a copy of her 1098T.  I haven't heard back (good or bad) from them.
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