Turbotax does calculate a tax on 529 distributions for the student even though it should not. There is a problem with the program and it has been there for three years. All three years I have noted it to Turbotax and actually spoke to one of their IT people in the first year I saw it. They confirmed the problem but did not fix it. I saw someone say you have to complete the steps of the program carefully, but even adding the 1098-T to my children's returns, which shows the money was all used for qualified distributions, does not fix this. The option to contact the IT department at Turbotax was removed this year. They just do not care.
