Dad pulled money from 529 to pay sons tuition but he can't claim him as a dependent

The recipient of the funds has to deal with reporting (if necessary).  Sounds like that's the son in your case.  Generally this goes one of two ways, 1) Dad gets a check from the plan and then pays expenses.  Dad gets the 1099-Q.  2) The plan sends the check directly to the school and the beneficiary gets the 1099-Q.

If the 1099-Q is in the son's name/SSN then have Dad give it to him to deal with.  This can be more of an art than a science since the ordering rules are taxpayer friendly and *someone* may get a nice AOTC refund (ex-wife?) if little Johnny picks up some taxable income.  Very situational though.

Rick

There is another potential issue here.  The original post says dad isn't claiming son because of the divorce decree.  If the son is emancipated in the state where they live, the divorce decree should be irrelevant. Dependency will solely be determined on the other rules as listed in Pub. 501 without any regard to rules for children of divorced or separated parents, as those rules no longer apply.

So if son is living with dad and emancipated under state law, assuming the other conditions in Pub. 501 are met, dad would get the exemption and the college credits if his income is not too high.  However, he still would end up with some income from the 10099Q if he claims the credits.