I'm the recipient of a $28,817 distribution from a state 529 Plan in 2020 benefitting my child, who is in graduate school (post-college). This entire amount was for qualified expenses. I received a 1098-T with $46,253 in scholarships, which the school kept and applied toward reduced tuition. Tuition payments to the school, including this $46,253 scholarship credit, were $59,895, so our out-of-pocket cost for tuition were around $16,000. My child also has $12,400 in room and board costs and $1100 for books. Total qualified expenses were thus $29,500, which exceeds the $28,817 529-plan distribution on the 1099-Q.
For reasons I don't understand, Turbotax's form, the 1099-Q worksheet, lists only $22,400 of the $28,817 distribution as qualified expenses, with $6,417 listed as "excess distributions" and lists $1,008 as taxable to me. I don't think that there were any "excess distributions" or that any of the distribution should be taxable, as it all went for qualified expenses. (My child had no work income related to the school.)
Help with entering the data so as to get the correct result on my forms would be very much appreciated.
