I ran into this same issue. It took me several hours to resolve. I even spoke to one of the CPAs that work for Turbo Tax. She tried to convince me that room and board is not a qualified educational expense in regards to a 529 plan. I finally got to a person who told me about the $10k entry on line 17 of the student work sheet. That led me to this thread. At the end of the day I ended up fixing this issue myself. I can't imagine how many people have ended up paying too much on their taxes because of this glitch. I avoided losing $1,300.
Next year I'm going to a CPA and I'm having them go through my past returns.
