Room and board deduction for college paid with a 529

[Hal_Al]

For 529 plans, there is an “owner” (usually the parent), and a “beneficiary” (usually the student dependent). The "recipient" of the distribution can be either the owner or the beneficiary depending on who the money was sent to. When the money goes directly from the Qualified Tuition Plan (QTP) to the school, the student is the "recipient". The distribution will be reported on IRS form 1099-Q.
The 1099-Q gets reported on the recipient's return.** The recipient's name & SS# will be on the 1099-Q.
Even though the 1099-Q is going on the student's return, the 1098-T should go on the parent's return, so you can claim the education credit. You can do this because he is your dependent.

Room and board are not qualified expenses (QE) for the tuition credit.  R&B is only a QE for the 529 distributions (1099-Q). Only the person entering the 1099-Q needs to enter R&B.  So, you should not be trying to enter R&B on form 8863.

[jorodrig]

There is a bug for sure. I have a lot more expenses than 529 distributions + scholarship Turbo Tax is telling me the scholarship my chid received is taxable income, which is not. It also not allowing me to claim education tax credits. Is the only way to fix this to deny that I receive a 1099Q or 1098T? I received both.

[bigdog7413]

I'm working out this issue myself self but I have an issue I can't figure out. My son's 1099 Q Gross Distribution is about 1000 more than the 1098T payments... which is fine because we bought him a computer for school with the 529 plan disbursement. But the Earnings on 1099 Q are $4464 and the basis is $8376. Does that mean He getting taxed on 4464 from a 529 plan? 

So here is where it matters. He had no wages in 2019. so do I file a return with only the 1099 Q for info? Or do I enter the 1099Q on My return and NOT file one for him? I started a return for him but is shows he has to pay $784 in taxes... on money that is supposed to be tax-free. I'm really missing something here. can anyone advise on what I'm doing wrong? 

I guess the real question is should I be entering both the 1098 T and the 1099 Q on my tax return or do I have to file a return for him because his name and his Social are on the 1099Q form.

[Fred_Fandango]

This is not correct, at least for the downloadable Home and Business version of Turbotax (2019 tax year). It is necessary to enter the room and board expense on the 1098-T form step by step dialog. You need to jump to 1098-T. This can be an issue. It isn't easy to jump to 1098-T but finally I got there (in step by step dialog)> There is no mention of room and board. Only book expenses! Wow is this confusing. If you click on the book expenses a bunch of boxes will pop up that allow you to enter room and board. Way to go Turbotax. One of another million instances where I'm my hair trying to figure out what to do. And, help on Turbotax sucks -- no help on this one.

[Carl]

When you have a 1099-Q it is extremely important that you work through the education section of the program in the order it is designed and intended to be used. If you do not, then there is a high probability that you will not be asked for room & board expenses, and you could therefore be TAXED on your 1099-Q funds.