I entered the 1099-Q and 1098-T in Turbo Tax Premier. The tuition on the 1098-T was $6 more than the distribution on the 1099-Q. Therefore, the 1099-Q is more than offset by tuition. There were no scholarships and no other distributions. In the section where it asks who the 1099-Q was for, if I enter the beneficiary, same as the recipient/beneficiary/student, it taxes the earnings amount from the 1099-Q. If I enter that the 1099-Q went to someone else, the 1099-Q is no longer taxable. This appears to be an error in the program as it should be non-taxable for the recipient/beneficiary/student and taxable for someone else. I cannot figure out how to report this.
If not, can someone please explain why the beneficiary/recipient/student is being taxed when the tuition offsets the distribution. This is the student's tax form.
