Education

Room and board are not considered deductible expenses, UNLESS the room and board was paid for with a Coverdell ESA or 529 plan distribution.  In that case, the cost can be deducted from the taxable portion of the distribution.  This is your situation.

First enter the education expenses in the 1098-T section following these steps:

1. In your return, click on Federal > Deductions.
2. In the Education section, click Start/Revisit next to Expenses and Scholarships (Form 1098-T).
3. Continue through the screens, entering the requested information. 
4. Room and Board are entered on the screen, Did [XX] Pay for Books or Materials to attend school.  [See screenshot below.]

Next enter your 1099-Q:

1. On the Deductions & Credits screen, scroll to the Education section.
2. Click the Start box next to ESA and 529 qualified tuition programs (Form 1099-Q).
3. On the screen, Tell us about your education plans, mark the YES radio button next to Did you receive a 1099-Q...
4. Continue through the screens, entering the requested information.
5. Since you entered room and board expenses in the 1098-T section, you should see the screen that your 1099-Q is not taxable!

@Amy278