I have run into exactly the same issue as OP for the last several years. Unfortunately, TT refuses to fix this problem.
The problem is made worse by some by some people here commenting who do not understand the tax law related to 529s. In another thread, someone says with great authority that if your income is too high to get the education credits, you are not eligible to make qualified withdrawals from your 529 without being taxed; this is false, which is easily seen by looking at the IRS documentation on 529s.
I also cannot get to the screen that would allow me to replace a 10,000 entry with a 0, which seems to have helped some people. I do not have a "here's your education summary" screen. I have gone through the interview portion on education five times already; no change.
The only way to avoid it that I have found is to not type in the 1099-Q at all; the IRS does not require it to be included. Not including the 1099-Q info in TT does however expose you to correspondence from the IRS; I received a CP2000 letter on 529 distributions, demanding tax; I replied that my child was in college and the distributions were for qualified expenses, which I listed, although I did not provide receipts. I later received a notice saying I was in the clear.
If TT would allow us to enter the 529 info correctly, this could all be avoided.
