529 withdrawal is being taxed?
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 There are no scholarships, no disallowed expenses, the amount withdrawn is less than the university's published cost of attendence.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.
