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What did you use the funds for, if not for college expenses?
Do you mean to took a distribution last year but did not use it for college expenses? That can be a problem.
Ok. When did you take the distribution? In December or earlier?
If it is one or two month before you paid the tuition and you did not have any other distribution for that semester, you can still argue that you used it to pay the tuition and college related expenses. But if it is more than one semester, than you will have a hard time to convince the IRS.
In the worst case scenario you will have to include the earnings, not the entire distribution in your taxable income and claim the entire credit next year.
Any questions? Is there anything else I can help you with today?