Education

the person who claims the dependent claims the 1098-T and the 1099-Q while it came to you, it should have a box that indicates it's the students.    Note the IRS only sees the net reported.  They don't see on your return the 1098-T nor the 1099-Q.  Bottom line is the person who claims the dependent can only claim the education expenses. So in a perfect world the education expenses claimed are bottom line, are funds paid with TAXABLE income.  So since your student is claiming themself, they claim it all.  Do note that to be eligible for the refundable portion of the tax credits, they must have earned income that pays over half their own support.  Otherwise, they can only reduce their tax liability.  And any excess scholarships, grants, room & board is 100% always claimed by the student.The 1099Q should be to the student or if to you, then Box 6. Designated Beneficiary Checked box if the recipient is not the designated beneficiary.

1098-T and 1099-Q are informational only.  they are only required to be reported to the extent you are taking tax credits for education or the 1099Q is in excess of qualified education expenses.  They are informational, the fact that some are accrual is also an issue. You only get to claim the amounts actually paid.   ONLY the person claiming the dependent can get education credits.  The student can have taxable income created on their return regardless of who claims them.   Simplest way to do the above in TT is to report both on person claiming the dependent.  If the parent is, TT will calculate any income needing to be reported on the students return which can be entered as a scholarship entry with no education expenses.  If the student is claiming themself, the program will calculate for you.  The only optional area of flexiblity is the amount used for education credits on the last screen, that amount is often defaulted to $10k, normally the best amount is $4k, but play with it, to see best outcome.

Bottom line, while you didn't report it correctly, the taxable income ended on your students return, and you did not get education credits.  Your return should show nothing for education in the end, only the students return should.  Yes it's all taxable income and subject to kiddie tax.  If you had reported the 1099Q on your childs return, you may have ended in a better scenario as only the earnings would have been taxed, not the whole amount.  You may want to see if reporting the whole thing on your childs return would have created a better tax scenario.... The 529 would have gone towards the room & board is why it would have been better and less taxable income would have been created as they would have entered all the education expenses..