Hal_Al, Thank you for your response. You are of course correct about my arithmetic error--thanks. (I noticed it right after I sent the question). I've adjusted the figures, so that the qualified expenses equal the 529 distribution, but I'm still seeing some anomalies that perhaps you can advise me on:
1) I don't understand why TT gives me a message saying that my child's education assistance counts as income and that my child needs to file a tax return and that the $46,253 is taxable. I believe this is not the case, since all the distribution was used for room/board, tuition, and books only.
2) when I followed your suggestion and looked for the student info worksheet, I see that there is no category for post-graduate/professional school. Should I check the box (2C) for "college," even though they graduated from college some years ago? Checking the "college" box seems to solve my "excess distribution" problem and reduce my "earnings taxable to recipient" to zero. However, on the worksheet, there is a black "x" for Part 2 (Student Information) for both questions 3 and 4 in the "No" column. The correct answers in this case are actually both "Yes"--they are in a degree program and they are doing a post-secondary degree to improve job skills-- but I don't seem able to change this No to a Yes on the form.
Appreciate your advice on this and would ask TT to consider adding a "Graduate School" category or more clearly differentiating between "College" and post-graduate degree programs, or else noting that "college" includes post-college programs, if that's how it works.
