Unable to get TurboTax to ask me about qualified education expenses when reviewing a 529 plan distribution

[DawnC]

If you received a 1099-Q and the full distribution was used on qualified education expenses, you should delete it as the form does not represent taxable income.    When you receive IRS Form 1099-Q, you'll need to report this information on your tax return if the distribution is used for non-qualifying expenses.

If your distribution matches or is less than the qualifying educational expenses, you don't need to report it as income; however, any excess is typically taxable and could be subject to a penalty.  See 1099-Q

How to delete forms in TurboTax Online 

How to delete forms in TurboTax Desktop

If you do have taxable income from a 1099-Q, you can enter that information in the 1098-T interview.   Where do I enter a 1099-Q?

[Hal_Al]

TurboTax is broken*.  

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." 

*One frequent problem, I've seen in this forum,, and it carries over from last year, is that TT has allocated $10,0000 of expenses to the tuition credit, instead of the more appropriate $4000 (or $0 if you  are not claiming the credit).  In the past, TT provided a screen  titled  “education expenses used for a tax credit”. It was usually prepopulated (often with $10K). You could change it for the amount you want to allocate to the ed credit. So far, this year, I haven't found that screen, even after recent updates.

If you don't get that screen, you can check the student information worksheet. You can manually change it there (line 18). Make the change in the first column, on the left. It was line 17 prior to 2025.