1099-Q - Distribution was not used to pay any education expenses. TT does not allow me to enter the info

[Ivan L]

I closed my daughter's (she is 4 yrs old) college plan in 2021  and rolled over money to UTMA account. 
As result 1099-Q was received. As far as I understand I have to pay income tax on earnings. Box 2 on the form earnings has few hundred dollars.  When I go to 1099-Q on turbotax.com here is what's happening: 
1. First question: Who's shown as the Recipient on your 1099-Q.
- I select "One of these dependents: Name (age 4)" because she is the actual recipient on 1099-Q
2. Next question: Who is the student
- I select "This distribution was not used to pay any education expenses" 
3. I get a page with this message: "Great news! You don't need to report this form. It looks like 1099-Q won't affect your taxes, so you can just skip this step. We'll take the form of your return"

QUESTION:
Is this expected? Why software does not allow me to proceed since money was used for non-educational expenses and there are some earnings in box 2. Plus as far as I understand I need to pay10% penalty? Thanks in advance for any assistance. 

[FangxiaL]

If you are not the recipient of the 1099-Q and your Social Security number is not shown on the form, you don't report the 1099-Q form on your tax return.