<p>Oh ok sblake - that is what I was confused about. </p>
<p>In that case OP you have calculated the portion of your scholarship that is taxable income. (It is the $5390 less the cost of books). If that is your only income you show that amount as the AGI. Then you show the same amount on worksheet C under scholarships included in AGI. </p>
<p>The EFC formula will deduct the worksheet C figure from the AGI so the net effect to your EFC will be 0. (probably sounds a bit pointless in your case as the two are equal but in most cases, where there is other income, they will not be. The reason behind it is that while the income may be taxable and therefore included in your AGI it is not supossed to affect your financial aid so is deducted out again via worksheet C)</p>
<p>You do not put the total scholarship/grant amount anywhere on FAFSA. All you need to be concerned about is the net figure you have calculated - total scholarships and grants less qualified expenses (tuition/fees/books) = taxable scholarships/grants. It is this taxable scholarships/grants number you report - nothing else.</p>