Can I include my daughter 1099-Q non-qualified distributions in my tax return.

[slamny]

I am the parent and my daughter is my dependent on my tax return. She is going to her 2nd year full time college.  She made $6000 in summer job with no Fed and State and City income tax deduct, she also had $600 interest. She went to City college with scholarships paid, so she didn't pay any tuition.  She took out $6980 as non-qualified 529, same as yearly tuition, so she doesn't has to pay for the penalty. She also took out $2788.80 as qualifed 529 for book and equipments. She got an 1099-Q address to her with her name and SS# with box 1 $9718.80, box 2 $3414.24 box 3 $6304.56 She also got the 1098-T address to her name and SS# box 1 $10650.77 box 4 $3133.07 box 5 $9739.22 box 6 $2809.22 I don't think I am qualify to claim college credit with my income.

[Hal_Al]

Since you're not eligible for a tax credit, the 1098-T does not go on the parent's return.  It doe go on the student's return to determine the taxable portion of the 1099-Q. That tax can be reduced by claiming room and board, even if the student lived at home (use the school's "allowance for attendance", which is usually available at the school's web site. 

I take "went to City college with scholarships paid, so she didn't pay any tuition" to mean the the scholarship was restricted to tuition; so declaring some of the scholarship taxable is not an option*. This is the usual technique for shifting expenses to the 529 distribution (or tuition credit). 

Boxes 4 and 6 of the 1098-T are usually blank.  Whether those numbers affect the 2023 tax return would require more explanation of what adjustments were made. We can probably ignore them. 

* Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the $13,850 filing requirement and the dependent standard deduction calculation (earned income + $400).  It is not earned income for the kiddie tax and other purposes (e.g. EIC).