Are you asking about an Education Credit or the exception to tax for the distribution?
If you used a 529 plan to pay all the education expenses, there would be no expenses left to apply towards an education credit and the distribution would be tax-free.
When there is a dependent student, education expenses, and an education savings account, there are options to how that can be allocated and an education credit may be possible, but it's complicated.
Who made the distributions is a factor. (The student should always make the distribution to pay for their expenses if they are the beneficiary of the account)
IRS PUB 970 is pretty clear about explaining the different options and gives examples.
We might be of further assistance here, but we would need more information to give any advice such as the numbers on the 1098-T, and 1099-Q as well as who was issued the 1099-Q and additional expenses the 1099-Q might be applied to, such as room and board.
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