Hi, I loaded a 1099-Q into Turbo tax with $19,000 Gross Distribution (box 1) and I loaded Earnings $5,300 (box 2). I also loaded 1098-T box 1 qualifying Tuition $8,500.00, Books Expenses loaded at $0.00. I STOP and see my Federal tax refund = $2000. When I load Room and Board $11,880.00..... my federal refund is the same = $2000. The room and board was paid for with the Gross 529 Distribution isn't some of it tax deductible. Reference: Turbo Tax:
The one exception is if room and board was paid for with a Coverdell ESA or 529 plan distribution. YES it was above. In that case, the cost can be deducted from the taxable portion of the distribution.
