Hi Hal_Al,
Thank you very much for your answer to my question. That makes a lot of sense and is very helpful.
I went through the 1099-Q and 1098-T numerous times and it still included a taxable portion of my 529 withdrawal. The odd thing was that it never asked me if my child was convicted for a felony. That question appeared when I did the Federal tax check. I answered "no" and didn't think much of it.
Just now I removed the 1099-Q information and re-entered that information and the 1098-T information. For some reason this time it asked me the felony question. I again answered that question as "no". However, now after completing the educational expenses section it didn't tax me for the 529 withdrawal to offset tuition expenses! Yeah, thank goodness. Not sure what happened previously, just thankful it worked out.
Again, thanks for taking the time to address my question. Hopefully this exchange will be helpful to others.
