When I entered a 1099-Q I received from a parents' 529 plan of which I am the beneficiary, TurboTax included the earnings in my income and it reduced my refund. However, the entire distribution was sent directly to my school for qualified education expenses, so is not taxable. I tried also entering my 1098-T, but this caused TurboTax to add the AOTC, which I know I don't qualify for because the tuition was paid from a 529. Adding the 1098-T didn't even remove the 529's earnings from my income!
What is the correct way to handle this situation? Do I not file the 1099-Q, because the entire amount was used for qualified education expenses?
I am claiming myself, and will not be claimed as a dependent on my parents' return, if this is relevant.
