I'm wondering if someone can explain this to me. Total tuition for 2020 is $64K. Taxpayer paid $33K and received a scholarship for $31K. The 1098-T shows the amount paid and the scholarship amount but doesn't account for the total tuition. The tuition was paid with a 529 account and TurboTax is subtracting the scholarship from the $33K making it seem like total expenses are only $2K and says the difference between the 529 distribution and the $2K is taxable. This doesn't make sense to me because the net out of pocket cost ($33K) far exceeds the distribution. Can someone explain this to me and if there is a different way to treat it in the program? I don't want to report a different amount than what is on the 1098.
