You said "I received **a** 1099-Q form, listing distributions that I took from **a**529 account to pay for education-expenses for my daughters - both are in college and my dependents."
That seems to indicate that you took money from a single 529 plan account and used it to pay expenses for two different students. You can't do that. The part of the distribution that paid expenses for the 2nd daughter (the one who isn't the beneficiary of the account) is a non qualified distribution.
"You may use a single 529 plan account to save for more than one child if you, as the account owner, change the beneficiary when it's time to pay for your next child's college expenses."
https://www.savingforcollege.com/article/pros-and-cons-of-separate-529-plans-for-two-or-more-childre....
