If you are a half time or more student, room and board (even if living at home) is a qualified expense for a 529 plan distribution. Entering R&B can free up some tuition to be used to claim the more generous American Opportunity Credit (AOC). The AOC is 100% of the first $2000 and 25% of the 2nd $2000. So, it takes $4000 of expenses to get the maximum $2500. The Lifetime Learning Credit LLC) is a straight 20% of up to $10,000 ($2000 max). You may only claim the AOC 4 times in your undergrad career. There is no limit on the number of times the LLC can be claimed. Grad school is not eligible for the AOC*. The LLC does not have a refundable portion, like the AOC does.
TT will select the best credit you qualify for.
https://www.irs.gov/Individuals/AOTC
https://www.irs.gov/newsroom/american-opportunity-tax-credit-questions-and-answers
https://www.irs.gov/individuals/llc
* Exception: You can claim graduate tuition if it occurs in the same year you complete your undergrad education.
