I am running into the same issue. I'm not sure TT is handling this situation correctly to give the best refund possible. My daughter is a teacher with over $800 in expenses for her classroom but was in a graduate program last year with non taxable expenses paid for through a 529 of over $7000. She is not a dependent on my taxes. After entering the 1099-Q info, her expenses to attend college, and teacher expenses through the step by step, TT gave this same message about entering $0 in teacher expenses. She doesn't get the Educator Expenses adjustment. As mentioned in previous comments I can remove the 1099-Q to get the Educator Expenses adjustment. If I look at the forms that TT will submit to the IRS it doesn't submit the 1099-Q. So why doesn't TT ignore the 1099-Q automatically if it would give me a better refund instead of me manually removing it? I would never know to remove the 1099-Q if I didn't come on this site.
