The IRS never sees the 1099-Q form, as there's no "output" form which addresses a 1099-Q calculation. If its taxable, the taxable amount goes on Line 21 of the 1040. If not taxable, nothing happens. There isn't an actual tax form which shows the reconciliation of 1099Q earnings and education expenses. Its a behind the scenes event, with only worksheets (that the IRS doesn't see).
Turbo Tax does require an upgrade to do the calculations and correlate with any possible education tax benefits/ credits. This is not just about the tax forms produced, but about the content itself. In all fairness, if you know its not taxable due to room and board, you don't need to go through the motions of entering the form at all.
If you are a dependent, please be sure that your parents account for the 1099-Q figures, if your room and board isn't greater than all the earnings on the distribution.
