@baffled321 said:
When I enter 1098-T and 1099-Q in TurboTax (TT), it immediately reports taxable withdrawal for the rolled over amount and offers American Opportunity Tax Credit (AOTC) which is incorrect as the fees/room/board expenses were paid with 529 money.
TT will assume you want to claim the AOTC, if you are eligible, even if it means paying a little tax on the 529 earnings (the 10% penalty is waived, for the AOTC). It the 1098-T has $13,000 in box 1 that usually (almost always) does not include room & board. You only need $4000 of R&B expenses to free up $4000 of tuition for the maximum AOTC.
Even though the 1099-Q issuer did not check the right box on the 1099-Q, you will be allowed to indicate the Roth rollover, in TurboTax.
