Simply delete the 1099-Q. When used for qualified expenses, it does not need to be reported.
When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records.
On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution."
Form 5329 is used to calculate the 10% penalty, or claim an exception to the penalty, when a portion of the distribution is taxable.
If you do enter the 1099-Q, you must also enter the education expenses. Even though you may have used the distribution for qualified expenses, you cannot claim the same expenses for a tuition credit or tax free scholarship (double dipping"). Most likely, you just have a data entry error.
