The 1098-T box 1 only reports "qualified" education expenses of tuition, books, and lab fees. Nothing else. It typically does not include the meal plan or room and board, because those are not qualified education expenses.
Box 5 is all scholarships, grants and any other amounts paid to the school by all entities. So if box 5 is greater than box 1, the difference "could" be taxable income to the student. But if that difference can be attributed to 529 distributions, then it can be used for the "allowed" expenses of room and board. The room and board claim against 529 distributions is allowed, provided that room and board was "in direct support" of the education.
If you'll just work through the education section the way it's designed, once you enter the 1099-Q, a later screen will ask you about room and board expenses.
