What you need to be concerned with is if the expenses paid in 2019 (with the distribution) were used for a credit on your 2019 return. If not, and you returned the refund to the 529 account within 60 days, you don't need to report the 1099-Q. In this case you also cannot claim the returned refund as a contribution on your state tax return if that state offers a credit for contributions.
This was something you should have addressed in 2020 for your 2019 tax filing.
If by some chance you did use the expenses for a credit on the 2019 return, you would need to refigure the 2019 return without the credit and claim the difference as income on the 2020 return. This scenario would be unlikely if you were matching distributions to tuition. The decrease in tuition for 2019 would be the same as the refunded distribution.
According to the IRS:
Credit recapture. If any tax-free educational assistance for the qualified education expenses paid in 2019, or any refund of your qualified education expenses paid in 2019, is received after you file your 2019 income tax return, you must recapture (repay) any excess credit. You do this by refiguring the amount of your adjusted qualified education expenses for 2019 by reducing the expenses by the amount of the refund or tax-free educational assistance. You then refigure your education credit(s) for 2019 and figure the amount by which your 2019 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.
IS Pub 970
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