Q. Please tell me I am not understanding?
A. TT is aware of the problem. But, I haven't actually heard that they are going to address it.
I surmise (they haven't actually said it) that one of the reasons is that users may lose out on the tuition credit if they think everything has already been covered by the 529 distribution. If you enter the 1099-Q and later enter the 1098-T and do everything right, and you don't have enough expenses for both the 529 distribution and the tuition credit, TT will give you a screen (Maximize my education benefit) where you can re-allocate some tuition from the 1099-Q to the Tuition credit. It will pre-populate the box with the suggested amount. It does a good job, but you have to "do everything right".
