is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

[CP1973]

where do you enter room and board expense?

[Hal_Al]

Yes, there is a software bug. You can't enter those room and board expenses yet. This is a known glitch in TurboTax (TT). They are working on it (no announced fix date).   The 2025 education and 529 sections appear totally redesigned, from last year.

[Bsch4477]

If all of your 529 distributions was used for qualified education expenses you don’t have to report your 1099-Q. 

[Hal_Al]

The 1099-Q is  only an informational document. The numbers on it are not required to be entered onto your (or your student's) tax return. The interview is complicated and it's easy to make mistakes. Avoid it if you can and you probably can. 

You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records (you don’t need it). You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. You also cannot count expenses that were paid by tax free scholarships.

References:

1. On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution." 
2. IRS Pub 970 states: “Generally, distributions are tax free if they aren't more than the beneficiary's AQEE for the year. Don't report tax-free distributions (including qualifying rollovers) on your tax return”.
3. "IRS Publication 970, Tax Benefits for Education states: If the entire 1099-Q went to qualified expenses, room and board, tuition, etc; then, you do not need to enter the form." 

[JFW3]

The answer to not reporting the 1099-Q form isn't why I use TT.  I want to enter the form, have TT ask the pertinent questions, and then have TT not include the amount in my taxable income.  In prior years, we could enter room and board expenses, and the program offset them with the 1099-Q, and didn't report taxable income.  There seem to be two bugs in the 1099-Q / 1098-T forms in 2025:  1.  Inability to enter other qualified education expenses; and 2. Handling of 529 to Roth rollovers.  Both of these incorrectly increase taxable income.  Both can be programmed correctly, rather than requiring users to keep track of unreported forms.

[MaxA1]

There is a TurboTax update that is expected to fix the issue regarding qualified education expenses for 529 distributions that is set to take place Friday, February 13.  Please check in after February 13th, if you are still experiencing issues.

[msedla]

Can you send an update to this post once the bug has been corrected? Thank you.

[campbellxvi]

This education expenses / room & board issue prompted me to switch to TaxFreeUSA after 25+ years with TurboTax. An occasional glitch is acceptable; having to wait weeks for a resolution is not . . . and what a revelation the switch has been! First, there's no room & board issue. Moreover, TaxFreeUSA's interview process does a good job advising on taxable vs nontaxable 529 withdrawals vis-à-vis education credits. Overall, TaxFreeUSA's system is more streamlined and significantly cheaper ($17 vs $100+ for federal and state). You can also pull over most-to-all of your data by uploading last year's return. For me, it was a simple drag-and-drop of a PDF file, and I was ready to go. Finally, I was concerned about its ability to handle our somewhat complex tax situation (W-2s, pension, crypto, self-employed income / expenses, capital gains, 529s / 1098-Ts, education credits), but there were no problems. If you're tired of waiting, give it a shot.

[AnnetteB6]

This experience is currently being addressed by the development team.  If further information is obtained such as an opportunity to register your email for updates, then it will be posted here.

@CP1973 

@msedla 

@campbellxvi 

[wibber17]

Hi,

After installing today’s update, Feb 26, on my desktop TurboTax 2025 version, the room and board option was now available to enter. Enter 1099-Q first, 1098-T second and that is where the missing Room and board option for College now displays in step-by-step entry.