You're not gonna get a clear cut answer, other than you shoulda done a better job on your timing.
The rules say is that the distribution must be in the same year that the expenses were paid to be a qualified distribution. Pub 970 is not that clear on whether the years must be matched, if you are only claiming the scholarship penalty exception.
I would claim the distribution on my 2021 tax return. TurboTax (TT) will calculate the taxable amount and prepare form 5329 to claim the penalty exception (because of the scholarship). We have not seen any reports of how the IRS will treat this situation in case of an audit. But, this is the advice usually given. Be prepared to explain it if you get an inquiry. We have noted, in this forum, a significant drop in IRS letters on 1099-Qs, as the IRS recognizes that they are always covered and well documented.
Be advised the TT interview is tricky. You need to have a sense of what the output should be.
Ignore the 2022 1099-Q, since it will have been reported on the 2021 return. 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."
