529 plan and entering qualified expenses not on 1098-T

[yooperchic1]

I pay for my daughter's education using a state 529 plan. The money I withdraw from the plan should be non-taxable if used for qualified expenses, but what is "qualified" for a 529 is not the same as the definition of a qualified expense for programs such as the American Opportunity credit (e.g., room and board can be paid for with a 529). First, where do I enter expenses NOT reported on a 1098-T, and second, I don't see any way to differentiate expenses based on how they are being paid for. Very frustrated with this!

[Hal_Al · Accepted solution]

To get the screen to enter Room & Board, answer yes when asked if you have book expenses.

Total qualified expenses (including room & board) less amounts paid by scholarship less amounts used to claim the Tuition credit equals the amount you can use to claim the earnings exclusion on the 1099-Q. 
Example:
  $10,000 in educational expenses(including room & board)

   -$3000 paid by tax free scholarship

   -$4000 used to claim the American Opportunity credit

 =$3000 Can be used against the 1099-Q 

Box 1 of the 1099-Q is $5000

Box 2 is $600

3000/5000=60% of the earnings are tax free

60%x600= $360

You have $240 of taxable income (600-360) 

However,  If you know that the total qualified expenses (after adjusting for grants & credits) was more than the box 1 amount on the 1099-Q; then don't enter the 1099-Q at all. When the taxable amount is zero, nothing goes on the actual tax return sent to the IRS