Q. How will turbo tax assess this if it's telling me our income is over $180k and we cannot deduct ant college expenses.
A. The $180K limit applies to being eligible for the Tuition credit. There is no income limit for a 529 Distribution to be tax free.
Q. You also said I can opt not to enter this, but the check was made out to me, the parent, not the child so won't I get in trouble for not reporting this amount.
A. Regardless of whether the student ("beneficiary") or the parent ("owner") is the "recipient'' (gets the check), you have the option of not reporting it, if you know none of it is taxable. The actual IRS instructions (quoted above) effectively say don't report it.
Q. And very frustrating that nothing for college can be deducted or considered.
A. You are getting a tax break, since the 1099-Q is not taxable (the earnings [box 2 of the 1099-Q] were tax free.
Q. Does the $180k based on AGI or what the govt looks at as taxable income?
A. AGI; technically MAGI, but for most people there's no difference.
