Q. Does student meet the criteria for self-support?
A. Simple answer: no. The reason is: the 529 distribution, in his name (his name & SS# as recipient) is still NOT student self support, because the parent is still the OWNER of the plan, even though the student is paying the tax on the excess distribution.
That said, the answer is not clear cut. The treatment of expenses paid with distributions from Sec. 529 plans and Coverdell ESAs in the support test is uncertain because of the dual nature of these college savings vehicles and a lack of IRS guidance. The consensus among tax experts is that it is parental support, because the parent is the owner of the plan. Making distributions to the beneficiary (or school) is helpful to your case, but it's a not controlling factor.
References:
https://www.savingforcollege.com/articles/the-impact-of-529-plans-on-claiming-a-dependent
http://www.aicpa.org/publications/taxadviser/2010/august/pages/nichols_aug-2010.aspx
