In the program, under Here's the income that VA handles differently:
- scroll down to Education
- select VA 529 Distribution or Refund
However. if not taxable on federal, there should not be a VA effect. You said the excess was less than the basis.
See 760 Instructions page 28 item 34 is for distributions that are taxable on federal return. Page 25 (page 16 on the document) is for additions.
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