Client received 2 1099-Qs, one in son's name ($4K earnings) and one in client's name. Education expenses were more than the 2 1099s combined.  I am almost certain this should all be tax-free, but I am having trouble finding the right way to enter in Proseries. 

1. If I enter both in client's return, proseries says part of it is taxable as other income

2. If I do a separate return for dependent, it shows $700 tax due, even though all this distribution was paid directly to school, but i am entering 1098T in the parent's return.

What's the best (right) way to enter these?