No, they are not reported as earnings. The 1099-Q does not have to be reported on your or your daughter's tax return. If the total amount of qualified education expenses is equal to the amount of the distribution from the 529 Plan, then you do not have to do anything with your 1099-Q except to keep it with your tax papers. You only need to report the 1099-Q when the 529 distribution is less than the total amount of tuition or if the amount is in excess of the tuition reported on the 1098-T.
I the 529 distribution was less than the amount of the tuition and scholarships reported on the 1098-T then you may qualify for an education credit. If the 529 distribution is more than the amount of tuition less scholarships, then the excess distribution has to be reported as income.
In your case, the funds were used to pay additional tuition that had not been reported on the 1098-T.
