TT won't use education expenses to offset 529 plan withdrawals

[trienzo]

Why wouldn't we also complete  lines 1-13 to show room and board charges that were paid for with 529 distributions? 

[Daddio253]

I am experiencing a similar situation.  My son is a dependent on my taxes.  He had eligible education expenses which I paid with funds from a 529 plan.  I received a 1099-Q on which I am the recipient.  The amount that we withdrew is fully offset by eligible, documented education expenses.  TT will not give me the option to enter any education expenses because my income is too high to be eligible to deduct them.  But I have already entered the info from the 1099-Q.  TT is seeing that as taxable income with no corresponding offset.   If I understand the response from SusanY1 correctly, she is suggesting I could omit the info from the 1099-Q from my return because it is entirely offset by eligible expenses.  I am only required to include it if the income reported on the 1099-Q exceeds the eligible expenses.  I can omit that form and simply keep the documentation of those expenses handy in case the IRS asks for clarification at some future date.  Do I understand that correctly?  Are distributions from 529 plans reported directly to the IRS or only if included in a return?

[AmyC]

The IRS receives all tax forms. The IRS is getting the 1098 and the 529. The IRS also is aware of room and board expenses. As long as your 529 is reasonable, the IRS will not care. In fact, when you enter the 529 in the program and then have expenses to offset, the form is not entered on your return. You can delete the Q and put it with your tax file.

Reference: Publication 970, Tax Benefits for Education.

@Daddio253