I have 2 daughters with identical situations (different numbers obviously) and turbo tax is treating them differently. We made a withdraw from each of their 529s in the amount of their scholarship for the year. Technically, they should both be taxed on the earnings of those withdraws. However, one is taxed and one is not. I went back and checked all the interview questions and i answered equivalently (again different numbers) for both of them. To simplify, we DO need to pay taxes on them because another relative actually pays their college tuition and because of the there is no other expenses to claim besides what is in box 1 of each of their 1098-Ts and those numbers are both larger than box 5 of their 1098-Ts (scholarship). The withdraws were for the exact amount of the scholarships. We also do not qualify for any of the other education credits. Also both 1099-Q have me as the recipient so need to go on my return. Although the calculations are in my favor, I am trying to be honest and not have an issue later.
