Thanks Sharon007,
He is 22 and a full time student that lives with us. We provide over half his support (room/board, utilities, etc). so I guess he's a Qualified Dependent for some kind of tax credit on our return.
The problem I have is that, if I include him as a dependent, and he says someone will claim him as a dependent on his return, his refund drops considerably, and we only get a $500 credit if he's on our return.
In simple terms, it's far more advantageous for him to include the 1099-Q and the 1098-T on his return and NOT have us claim him as a dependent on our return.
Now to the matter of why he has ANY income attribution for the 1099-Q earnings. The 529 money went directly to his qualified college. 100% was used for qualified tuition and fees. It's the exact same number on both box 1 of the1099-Q and box 1 of the 1098-T.
