I am running into a similar problem. We don't qualify for any of the tax credits.
My son attends a 4 year college and has a full scholarship. We took $31,660 out of our 529 plan and have $6,977 of qualified education expenses. We know that the earnings part of the excess $ taken out will be taxable and I am able to calculate the taxable income. The problem is that on Form 1099 Q worksheet that the adjusted qualified education expenses are only $6,362. Why are the adjusted qualified education expenses $615 less (line 2c of the QTP Computation of Taxable Distribution)?
