I got an ESA distribution to the exact amount of the college(not full-time) tuition fee. However when I entered this info in turbotax, I see that about 21% of distribution gets added to income in Schedule 1 form. I see some calculation on how this was arrived at. But can someone explain me this ? I was under the impression that if I use the distribution fully for a qualified expense like tuition, I should not get taxed.
Is there some easy guideline on how this is computed so that I can withdraw lesser than the actual tuition fee paid so that I do not get taxed at all.
My income is very low and I had some unemployment benefit in the year.
