Excess distributions beyond room and board along with education expenses is taxable for a 529. You do need to enter the Q and have the excess taxed. The IRS says you don't need to enter if all of the Q went to qualified expenses. In your case, if you had more taken than spent qualified education expenses, you do need to report the Q.
I find people often forget to use the 529 for Room and Board or don't realize that off-campus living can be included with a 529.
You are clearly very good at math- in the future, you can add room and board costs, additional supplies and (tuition-4k for credit) to see if the Q is over or under that amount. If under, no need to worry about it or enter it. If over, enter the Q and pay tax on the excess.
@j0mike1993 Well done!
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