@Hal_Al thanks for your response! I think I need to clarify something. You said our expenses are $11,246 + 8318 = 19,564. That is what the university received. But we only paid $8318 to the university. The rest was covered by scholarships. We then withdrew the value of the scholarships ($7395) from the 529 for us to keep (returned to us since the scholarships covered that). Put another way, the university received $8,318 from us and $7395 from scholarships, to total $15,713. So we withdrew $15,713 from the 529 to match. So don't we owe taxes on the earnings portion ($3486 according to 529 statement) of the $7395?
