@AN16
Delete the dependent and delete the 1099-Q and start over. At the beginning of the 1099-Q interview, you are asked who the beneficiary was. "Someone not listed" is a choice. When you select that, TurboTax (TT), later, gives you a screen to enter the expenses without entering the 1098-T. The problem comes when you first enter a dependent student and then change you mind.
If your son is claiming the tuition credit or deduction, you have to coordinate with him. You cannot double dip. He cannot count the same tuition money, for the tuition credit, that gets you an exclusion from the taxability of the earnings (interest) on the 1099-Q Since the credit is more generous; use as much of the tuition as is needed for the credit and the rest for the interest exclusion. Room & board and computers and books are also qualified expenses for a 1099-Q.
"I do not want to claim my son as a dependent (due to other reasons) as we don't get any of the credits due to income limits either.
Although you are allowed to not claim your dependent; he still must check the box on his form 1040 indicating that he CAN be claimed as a dependent. Checking that box limits what he can claim. In particular, he is not eligible for the refundable portion of the education credit (the $1000). If the student actually has a tax liability, there is a provision to allow him to claim a non-refundable tuition credit. But then the parent must forgo claiming the student as a dependent, and the $500 other dependent credit.
