You only need to pay tax on the amounts not used for qualified education expenses. If she had more expenses than the 1099-Q reports, don't enter it. 1099-Q Guide
If the distribution doesn’t exceed the amount of the student's qualifying expenses, then you don't have to report any of the distribution as income on your tax return. If the distribution exceeds these expenses, then you must report the earnings on the excess as "other income" on your tax return. When you pay a student’s school expenses with these funds, you cannot claim a tuition deduction or either of the educational tax credits for the same expense.
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