Yes, if your 1099-Q distribution is an amount higher than qualified expenses, it must be reported.
When the Form 1099-Q is issued to the 529 plan beneficiary, any taxable amount of the distribution will be reported on the beneficiary's income tax return. The earnings portion of a non-qualified 529 plan distribution is subject to income tax and a 10% penalty.
As AmyC said: If all of the distribution ends up being used for eligible expenses, then you do not have to enter the 1099-Q.
