If the student was not claimed as your dependent on your 2020 tax return, then you can't claim "any" deductions or credits for them, on your 2020 return. Hopefully, this will help you understand.
- Qualified education expenses are claimed in the tax year they are actually paid. It does not matter what tax year is paid *for*.
- Scholarships, grants and 529 distributions are claimed as taxable income *INITIALLY* in the tax year they are recieved. It does not matter what tax year that money was "for".
As for the 1099-Q, that gets reported on the tax return of the named beneficiary whose SSN is listed as the beneficiary on that 1099-Q. So if that's you the parent, and you are not claiming the student as your dependent for 2020, that means unfortunately, you have no qualified expenses to offset the taxability of the 529 withdrawal you made in 2020. It also means that in addition to paying taxes on that 529 distribution, you may also pay a penalty, unfortunately.
May I ask why you are not claiming the student as your dependent for 2020? Is it because they are over the age of 23 on Dec 31 of 2020?
