If the distribution for the expenses were made in a timely fashion, but crossed the tax year, and you did not apply the expenses to a credit, you should be able to ignore reporting the 1099-Q. Be sure to have records supporting that decision.
It is a grey area, but I would compare the distribution as a refund of expenses paid.
That could require "Credit Recapture" however, since you didn't apply for an education credit on your 2020 return, there would be no need to recapture anything.
According to the IRS:
"Refunds received after 2021 but before your income tax return is filed. If anyone receives a refund after 2021 of qualified education expenses paid on behalf of a student in 2021 and the refund is paid before you file an income tax return for 2021, the amount of qualified education expenses for 2021 is reduced by the amount of the refund."
Credit recapture. If any tax-free educational assistance for the qualified education expenses paid in 2021, or any refund of your qualified education expenses paid in 2021, is received after you file your 2021 income tax return, you must recapture (repay) any excess credit. You do this by refiguring the amount of your adjusted qualified education expenses for 2021 by reducing the expenses by the amount of the refund or tax-free educational assistance. You then refigure your education credit(s) for 2021 and figure the amount by which your 2021 tax liability would have increased if you claimed the refigured credit(s). Include that amount as an additional tax for the year the refund or tax-free assistance was received."
IRS Pub 970
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