Thanks for the response. I did that originally as I always go step by step from the beginning (after loading the previous year's returns), but I just deleted the 1099-Q and 1098-T sheets, as well as the student worksheet and re-entered everything, 1099-Q first, and it didn't make any difference. For whatever reason, TT doesn't seem to want to consider the usage of 529 funds for the student loan payment as valid expenses for the plan and considers it taxable income. In fact, if I remove the principal and interest amounts entirely my taxes owed actually goes down, which makes absolutely no sense at all.
At this point I give up. I'm just lucky I caught it or I would have paid more than $2K in taxes that I don't owe. Hope others with a similar situation double check everything before they file.
Thanks for trying to help.
