How do I avoid Turbo Tax from taxing my Segal AmeriCorps Education Award for Oregon state tax? It is supposed to be exempt from Oregon state tax.

Was it included as income on your federal return?   If so, you can remove it from your Oregon return.   When you go through your Oregon state return, look for a screen that says Here's the income that Oregon handles differently.   Scroll down to Other Subtractions to enter the deduction.   Answer YES after clicking on Start.   Scroll down to Scholarship Used for Housing Expenses and enter the amount.   

A subtraction is available for AmeriCorps volunteers who receive educational awards after completing a term of national service. For more information, see Publication OR-17, page 70.

Were you an AmeriCorps volunteer?  If you received a national service, summer of service, or silver scholar educational award from the federal Corporation for National and Community Service this year, you may subtract the award amount to the extent that it is included in your federal taxable income. The amount you are awarded under 42 U.S.C. Section 12602 must be received after your required term of service is completed. You can’t subtract any amount that you are deducting elsewhere on your return.