I am sorry I am not being clear. This is very confusing to explain I thought it was straightforward but maybe it’s not from your perspective. We received a bill from the university for $13,774. The university applied a $3500 scholarship against that. We took a distribution from her 529 plan to cover the $10,000 difference. That was a 1099Q with Sydney as the recipient our daughter. Further we took a 529 distribution for 3500 which was the amount of her scholarship. That was a 1099Q in my wife’s name who is the account owner. We took the $3500 distribution because essentially it was excess money and the 529 plan we would not need and we were told that could be withdrawn without paying the 10% penalty. I am struggling as to how to get TurboTax online to take the $3500 distribution into the form without charging a 10% penalty on the earnings portion.
