We (parents) have a first year college student. We didn’t know about the AOTC so we took a distribution (as recipients) from the 529 plan to cover the amount of tuition and expenses that remained for 2024 once the scholarship amount was applied. We entered the information from the 1098-T and the 1099-Q into TT and it shows that we qualify for the $2500 education credits however wouldn't this be double dipping? Why doesn't TT recognize this? Additionally, if we did want to try to qualify for the AOTC by identifying $2000 of the 529 distribution as taxable how would we enter that into TT? I understand that we would apply the formula for determining the taxable amount but when we enter the amount as miscellaneous income it still shows a $2500 education credit. Could you please explain to us how to handle this? Thank you!
