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1a. No.  Your original approach was correct.  You and your wife will both fill out the top half of schedule A exactly as @DaveF1006 says above.  You will enter $25,000 in column (h) which then leaves $25,000 for each of you in column (i).     2. You were also correct that Dave meant column (i) and made a typo.   3. You are also correct that the total gift is represented in column (g).

First off 2023?  The previous to 2025 is 2024. The taxes for 2024 is what the IRS is going to adjust for a SS lump payment in 2025 that part of it was for 2024.   When I right click on the box I see the option to ingore the error but nothing happens.   Why is it telling me something is not right?  What does it know?  I should be able to put in anything.  I hoped TT would have populated the box since it imported the 2024 data.

If you are not seeking the tax credits but rather want to just offset your 529 distributions, then you can add all your 529-eligible expenses (no matter what they are) into the Box 1 number.      As long as your 529 withdrawals don't exceed whatever you put into TurboTax's 1098-T box 1...  then the whole thing doesn't even make it to your tax return.  The worksheet calculates that you have no taxable income from the 529 distribution, and "poof" it's gone.

Yes, TurboTax will walk you through- but you will have to calculate the entries for the Colorado income.  You can use one half multiplied by the percentage of time she was a Colorado resident.  I would suggest keeping a copy of your calculations with your tax records.  @RaiderGatorBuff 

It works as you instructed.  thank you!  But Turbotax should fix this problem and give the option to choose COLLECTIBLE after importing from your broker.  To manually input all these data is very inconvenient and users should be alerted by Turbotax about this problem.  I wasted a whole day trying to figure out how to do this.   However, thanks again for the insight and solution!

Yes.  It is so difficult to get past the automated telephone system.  Insist that you need expert help because your program is not working.  Once you get through and your problem is not resolved get a support ID from them. I have been always downloading my TurboTax from the link provided by order cofirmation email.   I never had any problem installing and working with it.  This year it has become ridiculously difficult. You may be doing every thing right.

I did all of the steps, also cleared browser history, shut computer down, re-started...all of my financial institutions show a screen saying it's a success, but nothing is actually imported into TT.  I guess that TT has a different meaning for success!!

No. You don't use addtional tax payments to generate the penalty.  Here is the flow for how to enter in TurboTax and generate the 5329.   Follow these steps to force TurboTax to generate Part V of Form 5329:   Go to Federal Taxes > Deductions & Credits.  Locate the Education section and click Start/Revisit next to ESA and 529 (Form 1099-Q). Even if you did not receive a 1099-Q, you must proceed through this interview. When asked, "Were you the beneficiary of a Coverdell ESA?" (or if you are entering it for a dependent, answer accordingly), say Yes. Continue through the screens until you reach the prompt regarding contributions. Look for a screen that asks about excess contributions for prior years or current year contributions. Enter your excess amount there. TurboTax will spot the excess and create Form 5329 with the tax figured in Part V. That amount will then show up on Schedule 2, Line 8.