Indeed, Pub 970 does not appear to distinguish between a prepaid tuition plan and other QTPs, so your view should be valid. My understanding is based on the agreement of my plan (Private College 529 Plan by CollegeWell), which does not allow available funds to be used for anything other than tuition and mandatory fees.
If the IRS does not impose this limitation, then I believe that TurboTax is calculating "corrrectly" (that is, in line with IRS guidelines.) This is good news, since it will allow me to claim more of the AOTC credit ... thank you for the insight!
