Thanks for the reply.
I understand that the 1099-Q need not be reported if the entire distribution is accounted for with the expenses + student loan payments (assuming <= 10,000). I also understand based on your response that I can delete the 1099-Q from TT since it isn't necessary.
What I do not like is that TT is asking me (someone that isn't a tax expert) if I received a 1099-Q, which I did. I enter the 1099-Q. I then enter in all my expenses, I enter in the loan payment information. The total of all these expenses is > the 529 distribution reported on the 1099-Q and my taxes go UP. The student worksheet Part VIII line 8 shows "Earnings taxable to recipient..." as $0. Yet, on Schedule 1 Part I, line 8 and 9 it shows $5,500. This amount is carried forward to the 1040 form and I have to pay taxes + penalty on it.
To me, it seems something isn't working correctly within the software or the Schedule 1 would NOT show any excess income from the 529 plan - based on what I explained from the student worksheet.
I appreciate your time. Based on your response it would seem you are saying I need to say NO I did not receive a 1099-Q (when I did) and/or delete the 1099-Q forms from the project. I guess that's what I will have to do, but it just doesn't seem right. I have never had this issue before when entering the 1099-Q information, but this is the first year my expenses didn't exceed the distribution without the loan (which I know is new since 12/2019).
