Education Expenses

[Hal_Al]

@LaughTrack  said "Well, facts are the $ from the 529 was used to pay for tuition.   She was taking classes remotely and had no other expenses.   In my last go through, I eliminated the 1099-Q and then called the money drawn from it a "scholarship."   That reduced her credit pretty dramatically (and correctly, in my view.) "

Since you claimed  some of her  qualified expenses, on your return, for the 1099-Q, she has to reduce the amount of expenses she claims on her return.  Calling it scholarship is one workaround, to do that.

That said, room and board is a qualified expense, for the 529 distribution (claimed on your return) even if she took the courses remotely* .  You may claim her actual R&B expenses  or the school's allowance, whichever is less.  That should free up some or all of her tuition expenses to be claimed for the credit, on her return.

*She must be half time or more an the school must be an eligible institution.

[LaughTrack]

Thanks.   See my more recent comments.   And yes, her 1098-T says she is more than half-time.   And yes, she paid rent this past year so maybe that's another way to deal with the 529 payment (even though she was remote) though when I did it, I withdrew from the 529 to reimburse myself for paying for her tuition directly, not her rent.  If I can do that, she may well benefit.

[Hal_Al]

The fact that you withdrew from the 529  specifically to reimburse yourself for paying for her tuition, does not restrict you to allocating it that way.  You may claim that  the distribution was used for any qualified expense in the same calendar year as the withdrawal.   The beneficiary's Rent and groceries and eating out (room & board) are qualified expenses for a 529 distribution.