We are NOT eligible for the AOTC. Since the 529 disbursements are paid to our son, as the beneficiary, rather than myself, as the account holder, it seemed to make logical sense to include the disbursements, and therefore the offsetting expenses including the tuition payments from the 1098-T, on his return. TurboTax EasyStep seemed to be fine with this approach, up until the point where I entered the last of his offsetting expenses, at which point the program insisted that he couldn't claim a CREDIT (which I wasn't trying to claim) because he was a dependent on my return, and his 529 distributions were therefore taxable income for him.
