If you are unable to access the worksheets, use one of these workarounds. I tried both, they work. Due to rounding TT comes up with $2957 taxable amount.
1. At the 1099-Q interview, when asked who the student is, check "Someone else not listed here" (Lying to TurboTax to get it to do what you want does not constitute lying to the IRS). At the next screen type the student's name. Follow the interview until you get a screen "Non-dependent student expenses". Enter:
- Tuition and Enrollment Fees: 24980
- Books and course related materials: 266
- Room and Board: 5589
- Tax-free assistance: 10000
- Other adjustments: 4000 (the amount used to claim the AOTC)
Alternate workaround:
2. Delete the 1099-Q. That should give you the AOTC.
In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other reportable income (at the bottom)
- On the next screen, click yes
- On the next screen, you'll get blanks to enter the amount (2956) and a description (Qual State Tuition Prgm from 1099-Q). It will go on line 8 of Schedule 1 with that description. This is the exact same result as shoulda happened with the 1099-Q entry. But this work around will not produce form 5329 to document the penalty exception.
