You said you didn't know why th 1099-Q earnings were taxable. I said because you didn't tell the software that the money was used fo education expenses.

If it's going to be nontaxable, I was pointing out that you have to deduct  the nontaxable amount from the tuition expenses used for the credit. You can't say I paid for tuition with yax free money so give me a credit for the tuition. That would be double dipping.

Depending on the tax bracket, your result of paying tax on the 529 Plan earnings and taking the tuition credit may be a better result.

I'm not going to try  to follow your numbers.