This is a known problem in TurboTax and they will not be fixing it anytime soon.
The simple solution is just not report the 1099-Q, at all, if your
student-beneficiary has sufficient educational expenses, including room &
board (even if he lives at home) to cover the distribution. When the box 1 amount on form 1099-Q is fully
covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual
tax forms.
Alternatively, go through the education section again. When you get to the screen that says “Here’s your Education Summary”. Click edit next to “Education Information”. When you get to the screen titled “Amount Used to Calculate Education Deduction or Credit”, verify the amount you want to use or change it to 0.
Reference: https://ttlc.intuit.com/questions/3129346-how-do-i-fix-an-error-where-turbotax-incorrectly-treats-a-...
