Don't bother the school asking for a breakdown of the 1098-T. They are overwhelmed with questions, this time of year. Box 1 is tuition and fees, box 5 is scholarships. There's nothing you need. The breakdown is in the billing statements. The 1098-T and the billing statements is all you need to satisfy an IRS inquiry. I know that from personal experience; I got an IRS CP-2000 my youngest's last year in college.
Q. Goal is to make sure to file correctly not missing any form that may cause inconvenience to the student later.
A. When the 529 distribution is fully covered, no form is sent to the IRS. If TT does it correctly, you get the same result, whether you enter anything or not.
It you want to get the TurboTax (TT) worksheets, enter the 1099-Q first. Later, at the Educational expenses section, you do enter the 1098-T. You also answer yes to the book expenses question, so that TT will present you with the screen to enter room& board expenses, as well as books. Here's the kicker: TT will/may assume the parent is claiming the tuition credit and allocate some of the tuition to the credit. It should take you to a screen titled “Amount Used to Calculate Education Credit”, verify the amount you want to use or change it (to $0, in your case).
If that doesn't work, here's a work around: delete the 1098-T. At the screen titled "Your Education Expenses Summary". Click delete next to the student's name. Go back to the 1099-Q section. When asked who the student is answer: someone else not listed here (lying to TurboTax to get it to do what you want does not constitute lying to the IRS). Enter the student's name when asked. A few screens later, you'll get one simple screen to enter expenses. Press Done at the 1099-Q summary screen, to get there. Also enter the amount of the scholarship in the box "Tax-free assistance".
If that doesn't work, accept the fact that TT isn't gonna give you an accurate work sheet and delete the 1099-Q.
