Q. Since that money went directly to the university for his tuition and room and board, we expect to pay nothing in taxes on the earnings of $2370. How do I enter the forms in TurboTax for that to happen?
Good, you know the expected outcome.
Delete the 1098-T and 1099-Q you already entered Re-Enter the 1099-Q before you enter the 1098-T, Otherwise you won't get the room and board screen. You will not get a screen to enter
total amount paid ($11,188). By entering the 1098-T, you effectively enter the $3624 tuition you paid (9481-5857). Then you enter your other education expenses (R&B, books and a computer). You must also complete the “Education Information” sub-section. In particular, be on the lookout for a screen “education expenses used for a tax credit”. It will usually be prepopulated (sometimes with $10K instead of the more appropriate $4K). You can change it for the amount you want to allocate to the ed credit, $0, in your case. When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records.
If that fails, just delete the 1099-Q and 1098-T, as you know you have nothing to report about education on either your or the student's returns.
