What does "apparently were not 'qualified' expenses" mean.
Tuition, fees, books, computers, other required course material and ROOM & BOARD are qualified expenses. Board is a qualified expense, even if the student lives at home.
You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. 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. You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. You cannot double dip!
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."
If you are the "recipient" of the 1099-Q (your name & SS# are on it), the taxable portion goes on your tax return, not the student's.
