Emphasizing what Fangxial said, you should enter the 1098-T, on your tax return to claim the education credit* on your student-dependent's tuition.
But, doesn't he need to claim the tuition to keep the 1099-Q from being taxable. Not exactly. You will only need to use $4000 of the tuition to claim the the American Opportunity Credit. The rest of the tuition can be applied to the 1099-Q. Room and board* (even if living off campus) and books and computers are also qualified expenses for a 1099-Q. So there are plenty of expenses to offset the 1099-Q. So, he still will not need to file a tax return and the 1099-Q does not have to be reported at all.
You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records. You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. You also cannot count expenses that were paid by tax free scholarships. You cannot double dip!
On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution."
*Student must be half time or more
