Thanks. I have read about this loophole. Would you be able to answer my original questions?
Scholarship income is a "hybrid". Although it is unearned income for purposes of the "kiddie tax" and other things; it is considered earned income for the purpose of calculating the student's standard deduction (earned income + $350). So, unless he has more than $12,550 total income, he does not need to file. So, he does not need to enter it.
If needed, it is carefully entered in the education deduction section (not in the wages and income section). TurboTax balance scholarship and expenses to arrive at the taxable amount, theoretically. In actuality, it's best to use a workaround.
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