The interview is actually easier when the student is not your dependent.
After
-On the screen that asks Who's the student? Select Someone else not listed here
-Continue, and Add a New Student on the next screen.
You will encounter a simple screen to enter the student's expenses. You do not "file" her 1098-T, but you do use the info on it. She will also use it to file for a tuition credit.
Better yet:
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 and the student would still have to do the math to see if there were enough expenses left over for her to claim the tuition credit. She 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."
