It depends on whether the funds were used for education expenses.
IF THEY WERE, the distribution is not taxable, and you either don't report it
OR
enter it into the TurboTax program in which case you will be asked what the distribution was used for.
In your case, you would choose "Education expenses for someone else not on this return" and that would be the end of it, it would not be reported.
If you did not use for education expenses, you will enter the 1099-Q and answer that it was not used for education expenses, in which case it will be reported as taxable income on your return.
Of course there is more to it.
IF it was used for education expenses for someone not listed as your dependent, you will need to get together with the student and make sure the expenses you are allocating to the distribution is not also used by the student. Education expenses can go towards scholarships, OR distributions OR other tax-free assistance OR education credits, but they can only be allocated once.
Why are you making distributions when you are not the student? If nothing else, transfer the funds to the school so the 1099-Q will be properly issued to the non-dependent student.
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