I received 1099-Qs for my three grandchildren who attend a K-12 parochial school. The distributions were for tuition only (no books or activities) which I understand are qualified expenses not subject to taxation. However, when I enter the data from the 1099-Q into TurboTax (I'm listed as the recipient even though the checks are sent directly to the school), the software shows the earnings as taxable, and reduces my refund.
The software asks me if I received a 1099-Q, and I don't want to say "No" since I did, but it seems to me that it should ask the question, "Are you required to report the distributions?" or some other question that clarifies that the earnings are not taxable. Is my assumption that the earnings aren't taxable correct? How should I report the 1099-Q info?
