You have a 1099-Q entered. After deducting all the allowed room and board expenses, you still paid more than the tuition and fees so the program is trying to figure out how much of that to make taxable to give you the biggest credit.
You comment that it is a nontaxable distribution, if you mean all of it is nontaxable, the 1099-Q should not be entered. IRS Publication 970, Tax Benefits for Education states on page 45: Don't report tax-free distributions (including qualifying rollovers) on your tax return.
If the Q is truly non-taxable, remove it and that solves your issues.
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