Education
Although it is true that the taxable portion of your son's 1099-Q will be reported and taxed on the student's tax return, entering all the forms on the parent's return will allow your program to make the calculations.
To use this function, first omit the student's 1099-Q, and enter all the education information, including your 1099-Q and the 1098-T.
After you get YOUR result (credit or tax) go back to the 1099-Q section and add the student's 1099-Q. Now YOUR program will tell you what to report on the student's return.
Most likely, in your situation, the program will suggest you take the American Opportunity Tax Credit and have the student claim 5,500 of his distribution.
Looking at your numbers, I think the best tax break would be to use 4,000 expenses for the credit leaving 5,500 that the student would need to claim, however you would also need to meet the other credit requirements, such as income limits.
As pointed out earlier, rather than the distribution, you could allocate a portion of the scholarships to the student, but you would need to do this manually by adjusting the numbers you enter from the 1098-T. The program may not make that distinction (Scholarship income versus 529 income) when reporting what the student needs to claim.
