Level 15
This widget could not be displayed.

Education

I'm not sure what you mean by "exception withdrawal".  The fact that the funding was from scholarship money  does not change the fact that you will have a distribution (withdrawal) and will get a form 1099-Q.   The only question is how will that distribution (box 1 of the 1099-Q) be split between basis (box 3 of the 1099-Q) and earnings (box 2).  The plan administrator (custodian) will make that determination.

 

As long as you used the total distribution for qualified expenses (including room & board), none of it will be taxable.   If you did not use if for qualified expenses, just enter the 1099-Q and TurboTax will treat the entire box 2 amount as taxable (not the box 1 amount).