My son is a full time student and I claim him as a dependent on my tax return. He received 1099-Q from that indicates that Gross Distributions (Box 1) are $57,430. The qualified higher education expenses on 1098-T form are $61,541 and there are no refunds and scholarship. However, after I entered both forms on my son's tax return, TurboTax reduced the Adjusted Higher Education Expenses applied by $10,000, making them $51,541 instead of $61,541 on "Qualified Tuition Program (QTP) Computation of Taxable Distribution" worksheet. This change generates a taxable amount of $1,475. Why did TurboTax make this adjustment? It sounds like a bug to me.
