True, distributions taken but offset by scholarships are not subject to the penalty tax.
If the 1098-T is inputted before the 1099-Q, the TurboTax program might have a hard time with the 1099-Q.
Please review the education interview and re-answer the questions to get to the last "Maximize My Tax Break" screen. The program may re-calculate at that point.
If not, you could delete the 1098-T and reenter, but going back through the (ENTIRE) education interview usually resets it.
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