The 1099Q Qualified expenses are amounts paid for tuition, fees and other related expense for an eligible student that are required for enrollment or attendance at an eligible educational institution. You must pay the expenses for an academic period* that starts during the tax year or the first three months of the next tax year.
The 1099-Q IS NOT REQUIRED TO BE ENTERED. IT IS INFORMATIONAL ONLY. You only need to enter the portion that WAS NOT used for qualified education expenses and that would be reported on the students tax return.
So in your scenario let's says the 1099-Q was for 20k for 2017, the expense for college paid within the first 3 months were $25k, there is nothing required to be entered.
Do NOT next year then claim those expenses paid on your 2018 return as you did use tax free money to cover the costs in 2017 and that would be double dipping. You could only enter $5k in 2018 as that was portion that did not use tax free funds not used in 2017.
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