I'll go with the first part of your answer, "You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, to cover the distribution". Thank you.
Turbo Tax simply askes, "did you receive a 10-99Q?". Following the answers exactly, it adds $472 to my tax obligation. Perhaps it could ask one more question, "was the distribution for a qualified tax-exempt purpose". I have no idea what you mean when you say, "The only relevance to the beneficiary not being the recipient is the flow of the interview. When you get to the 1099-Q summary screen, click Done (don't jump to another section). Clicking Done gets you another screen that asks "What level of school did the student attend" When you answer high school or elementary, it will give you a screen to enter expenses rather than waiting for the college expense section later." I don't see that option at all in 2021. She is not in college. There are no college expenses. This is an allowed distribution for parochial school tuition. The college questions and expenses are irrelevant. There is no 1098T and the interview doesn't erase the additional tax. Thank you
