I am doing taxes for my daughter. She has a OH 529 Plan distribution. We used all of that for her college fees last year. Turbotax is showing that as taxable income. Why?

When you went through the questions after entering her 1098-T, you were asked how much of her expenses you wanted to allocate to education credits, you needed to enter an amount that would leave enough expense to make the distribution nontaxable.  You can only use the expenses for the credit Or to make the distribution nontaxable.  To change our answer, enter education expenses in the Find window on the upper right, hit enter, then the Jump To.  Go back through the interview again.