Maybe. Let's get this all straight. 529 distribution for $13,000 and tuition refund of $6,000. If those are the only numbers, then we are missing room and board, school supplies, etc.

A 529 distribution is not taxable when spent on qualified expenses. The extra $6,000 may have gone towards qualified expenses. If living at home, a good portion of it would still count for room and board. See page 52 for qualified distributions at IRS Publication 970, Tax Benefits for Education.

If you actually have taxable income and earnings, the program will calculate it after you take out everything. The name on the 529 can be the one to bear the brunt. The first$12,400 of income is not taxed so a student usually does best to claim 529 income that is in excess of expenditures.

However, you do not need to enter the 1099-Q at all if all of the distribution is not taxable.

Thank you for your helpful reply.

First, the $13k included all college expenses - tuition, R & B. It was our portion after the financial aid package.

Second, it was qualified, however, the refund was the result of my daughter dropping out half way through the semester. Thus, actual expense was pro rated for the time in school and was only half the amount. It was not an extra expense.

So it sounds like since my daughter is the beneficiary and the reimbursement came to her, she could claim it for her taxes. Since she had no other income in 2020, other than this $3000 in investment income, she would not even have to file taxes. Is that correct?

I think your response is helpful.  Please confirm my interpretation.  Due to COVID, my daughter got sent home from school and attended school on-line second semester 2020.  So, can the extra funds that I initially deducted for College from the 529, be used for room and board?  I am having hard time trying to figure out how to report the 1100 on my taxes using the Turbo Tax.  Also,  is it necessary to report it? 

She is still attending college and funds are consistently used in 2021.  I am just taking it out as needed as I am not sure if COVID will result in her being sent home again.  

@GregoryJK You are doing Kiddie tax on your return for the investment income then a separate return would not be necessary since below the threshold. See:

• Do I need to report my child's 1099-INT on my return?
• What is the Kiddie Tax?

@Revchap7 Room and board costs do exist to an extent at home. There is still some food expenditure and internet expenses along with any other school needed supplies. If it is only $1,100, that could be covered by the internet and food alone.  Do document in your notes why you did not claim, in case you are asked. See page 52 for qualified distributions at IRS Publication 970, Tax Benefits for Education.