"We used 1 kid's 529 to pay for both kids' qualified expenses"
You're not allowed to do that. The portion that went for the kid, who is not the beneficiary, is a non-qualified distribution.
What you are allowed to do is transfer (rollover) money from that account to the 2nd kid's account, or to a new account for the 2nd kid. Or, you could change the beneficiary of the old account, to the 2nd kid, after taking out the money needed for the 1st kid's expenses.
To get the screen to enter Room & Board, answer yes when asked if you have book expenses, in the 1098-T and educational expenses section. For the R&B entry box to appear, you must have entered the 1099-Q prior, so TT knows why you need to enter R&B.
Q. instead can I just enter those expenses in one of the books & materials? And if so, which one, required or not required?
A. Only if you are not claiming a tuition credit and/or tax free scholarship (R&B are not qualified expenses for those). It's OK if you are only doing it for a 529 distribution. It doesn't matter which.
