Turbotax is not letting me offset a 529 distribution with education expenses because my income is too high for 1098-T deductions. What should I do?

This is a known problem in TurboTax and they will not be fixing it anytime soon.

The simple solution is 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. 

Alternatively, go through the education section again. When you get to the screen that says “Here’s your Education Summary”.  Click edit next to “Education Information”. When you get to the screen titled “Amount Used to Calculate Education Deduction or Credit”, verify the amount you want to use or change it to 0.

Reference: https://ttlc.intuit.com/questions/3129346-how-do-i-fix-an-error-where-turbotax-incorrectly-treats-a-portion-of-a-529-distribution-as-taxable-even-though-qualified-expenses-exceed-the-distribution?jump_to=comment_6831879

this is unacceptable    Time to go to another provider.    

This is a 10 month old post referring to a 2017 tax return. It may not apply to 2018.

still the case in 2018.  i just encountered it

Problem also exists in 2019.. Good job, Intuit /s