Why aren't my education expenses I entered appearing in the "Expenses and Scholarships" section of the Deductions & Credits summary?

[ahzimmerman]

I've entered all the information for two children attending two different colleges yet for 2022 tax year on the summary page, it says $0.

[Hal_Al]

Your expenses don't go on that page. The Education credit that is calculated, from those expenses,  will appear on that page (usually $2500, but could be less).  If you're not getting that, check form 8863 for the calculations. If you don't have a form 8863, you've entered something wrong or you don't qualify for a education/tuition credit.

[RalphH1]

Those summary page numbers can signify different things (depending on the tax topic). In the case of education expenses, it’s showing the amount that’s being used for a credit or deduction. A zero there probably means your 1098-T box 5 financial aid amount is greater than the tuition in box 1, so there’s nothing left to use for a credit. (As long as all the education info has been entered — otherwise the zero could just mean the program isn’t yet able to calculate an accurate result…)

Note that any dollar of “qualifying education expenses” (i.e. tuition and fees, plus some other things, depending on which credit) can be used for only one tax benefit: to either exclude a dollar of financial aid from tax or to get a credit (but never both—that’s called “double-dipping”). However, it is possible to say that you used your financial aid on something else (besides tuition), increasing your tax on that, so that you have more qualifying tuition to use for an education credit which is actually larger than that additional tax on the financial aid (sometimes much larger).

For example, if you have $4,000 of scholarship funds and $4,000 of tuition, you can say you used all $4,000 of the scholarship on “room & board” (which is not a qualified expense, and so it makes the whole amount taxable). That means you can use the entire $4,000 of tuition for a maximum “American Opportunity Credit” (the excellent credit to which Hal_Al referred, which is a dollar-for-dollar “refund” of the first $2,000 of qualifying education expenses, and 25% of the second $2,000).

Here is the IRS telling us about this treatment, and here’s a TurboTax support discussion with some of the logistics in the program. Note that it is more applicable to undergraduates (as the American Opportunity Credit is the best one, and only available to them), and also that the scholarship must not be specifically earmarked for actual tuition payments (see RaifH’s post in that last thread).

The concepts here are pretty simple, but applying them can get a little tricky (which is usually the case in taxes). However, @ahzimmerman, this is an area where people leave a lot of money on the table (because sometimes it almost seems like cheating), so I recommend checking it out, and following up with questions if you have any!

[ahzimmerman]

Thx for detailed response! In my case, I know I don’t qualify for the educational credit, however, I did use a lot of 529 funds to pay for two schools and wanted to make sure everything was reflected properly in the education expenses section. So it’s disconcerting that, on that summary page, it only lists one of the two schools and says zero dollars.

[Hal_Al]

"Deductions" to offset 529 distributions aren't going to show on that page.  That page is for deductions that reduce taxable income and credits that reduce tax.

"Deductions" (qualified educational expenses) that are used in the calculation of the taxable portion (if any) of a 529 distribution are only shown on the educational work sheets.  

[Hal_Al]

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 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. You cannot double dip! 

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." 

__________________________________________________________________________________________

Qualified Tuition Plans  (QTP 529 Plans) Distributions

General Discussion

It’s complicated.

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.

You can and should claim the tuition credit before claiming the 529 plan earnings exclusion. The educational expenses he claims for the 1099-Q should be reduced by the amount of educational expenses you claim for the credit.
But be aware, you can not double dip. You cannot count the same tuition money, for the tuition credit,  that gets him an exclusion from the taxability of the earnings (interest) on the 529 plan. Since the credit is more generous; use as much of the tuition as is needed for the credit and the rest for the interest exclusion. Another special rule allows you to claim the tuition credit even though it was "his" money that paid the tuition.
In addition, there is another rule that says the 10% penalty is waived if he was unable to cover the 529 plan withdrawal with educational expenses either because he got scholarships or the expenses were used (by him or the parents) to claim the credits. He'll have to pay tax on the earnings, at his lower tax rate (subject to the “kiddie tax”), but not the penalty.

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 (usually on the student’s return)

Box 1 of the 1099-Q is $5000

Box 2 is $2800

3000/5000=60% of the earnings are tax free; 40% are taxable

40% x 2800= $1120

You have $1120 of taxable income  

**Alternatively; 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. You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. Again, you cannot double dip!  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, in case of an IRS inquiry.

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." 

***Another alternative is have the student report some of his scholarship as taxable income, to free up some expenses for the 1099-Q and/or tuition credit. Most people come out better having the scholarship taxable before the 529 earnings.