My son took a few classes this year at a community college, and paid for them from his 529 plan. Although he is eligible for the American Opportunity Tax Credit and Turbotax understandably suggests that he take it, he doesn't want to use up a year of eligibility when qualified education expenses were so low. We've managed to override the AOTC selection, but when we do that, the program does not subtract his QHEE from his 529 distribution, instead treating the distribution minus basis as taxable income. We should be able to fix this, right? But how?
