529 withdrawal is being taxed?

[lk12345]

I've been reporting my kids' 529 withdrawals for 6 years.  This year turbotax is telling me that we owe tax on about $5K of the $40k withdrawal amount.  But it won't tell me why.  Nothing has changed from prior years - I even pulled up previous returns to check, and compared the entries line by line.  I tried putting in fake numbers to see how it affected the outcome, but when I (for example) pretend room and board was $5k higher the amount goes down, yet not by the full $5k.  There are no scholarships, no disallowed expenses, the amount withdrawn is less than the university's published cost of attendence.  Its all completely straightforward - we paid tuition and (off campus, like last year) room and board. It definitely should not be taxable, and never has been before.

How do I figure this out? There is no info provided.

[AmyC]

The IRS does not want you to enter nontaxable 1099-Q. Remove it from the software, place it in your tax file with your records. IRS Publication 970, Tax Benefits for Education states:

Page 45: Don't report tax-free distributions (including qualifying rollovers) on your tax return.