If, after using $4000 of the tuition expense to claim the AOC, on your tax return, there were enough expenses* left over to cover box 1 of the 1099-Q, the 1099-Q 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.
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."
* qualified expenses, for 529 plan distributions, include books and computers and even meals for commuting students. Commuters may keep track of actual food cost or use the school's meal allowance for on-campus students, whichever is less.
For 529 plans, there is an “owner” (usually the parent), and a “beneficiary” (usually the student dependent). The "recipient" of the distribution can be either the owner or the beneficiary depending on who the money was sent to. When the money goes directly from the Qualified Tuition Plan (QTP) to the school, the student is the "recipient". The distribution will be reported on IRS form 1099-Q.
If you do need to report it, the 1099-Q gets reported on the recipient's return. The recipient's name & SS# will be on the 1099-Q.
