Last September I switched my granddaughter’s 529 from one financial institution to another. She’s only 4, no money was withdrawn, money was sent from a Raymond James 529 account to Fidelity UFund. Raymond James has filed a 1099-Q, The Trustee to Trustee transfer box is checked. When I enter this information in TurboTax, it significantly reduces my refund amount. I was under the impression that moving money from one 529 plan to another should not create a taxable event.
You are correct, you do not have a taxable event.
You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including a roll over to another plan, to cover the distribution. When the box 1 amount on form 1099-Q is fully covered (and it is in your case), TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records.
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Just delete the 1099-Q and not have to deal with the complicated 1099-Q interview.