You don't have to qualify for an education credit/deduction to be able to waive the penalty for early IRA distribution for the education expenses you paid. They are separate items, each with its own criteria.
For the education credits/deduction (as you know), there is an AGI phase out. But not for the penalty waiver on the IRA distribution. In addition, for at least half-time students, room & board counts as a qualified expense for the waiver, where it does not count for the credits/deduction.
What you'll need to do is answer the waiver questions that TurboTax asks on the 1099-R entry screens after you input your 1099-R info (Federal Taxes > Wages & Income > Retirement Plans & Social Security > IRA, 401(k), Pension Plan Withdrawals (1099-R).
You'll first answer a variety of non-waiver-related questions before coming to the screen that says Let's see if we can reduce your early withdrawal penalty. Next you'll land on the screen asking Did you use your IRA to pay for any of these expenses, and you'll see an entry box next to Higher Education. Enter the amount of your qualified education expenses here. Again, it is unrelated to the entries for the education credits/deduction.
If the amount you enter here is less than the total distribution amount taken, then TurboTax will subtract it and you'll pay the penalty on the remainder. If the expense total is equal to or higher than the IRA distribution, then you won't pay the 10% penalty on any of it.
Lastly, you'll see the penalty calculation on Form 5329. Any penalty will then carry to line 59 of the 1040.
Here's a link to IRS Pub 970 which covers this IRA penalty exception in section 9, p. 61: https://www.irs.gov/pub/irs-pdf/p970.pdf
