Get your taxes done using TurboTax

No, I only entered interest in my example and line 5 shows it is for principal and interest. However, to get the full deduction, I ended up have to put the principal and interest in box 3 for the subtraction to leave the interest as the deduction. You are right about the full exclusion available which means the notes I read on filling it out were incorrect. I will change my notes!   

You want to fill out the form so that your tax liability is correct. If you are ever audited, the paperwork is not as important as the law and tax liability. Keep a note in your tax file for why you filled the form out like this - just in case the IRS ever asks.

If I put in the proceeds of $350 or more, here $450, as paid to the 529, then list $350 for the principal and interest, the calculations work out.