I appreciate all of the detail, but I'm still stuck. For clarification, we are not eligible for any of education credits.
If I remove my son's 1099-Q and the 1098-T, all of the distribution is considered taxable (including the room and board that I paid) and I am being charged the 10% penalty on earnings since there isn't any offsetting tuition or scholarship. Through manually answering questions on the underlying student worksheet, I can get the room and board reflected as non-taxable, but I'm still being charged the penalty on the portion I withdrew equivalent to the scholarship.
If I enter the 1098-T and my 1099-Q, there aren't any taxable earnings since my withdrawals against the 529 are less than the amount shown on the 1098-T.
The only way that I've been able to get this to calculate correctly is to basically under-report the tuition from the 1098-T.
How do I get out this morass?
