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First there is no tax is due on a distribution from a 529 plan unless the amount distributed is greater than the beneficiary's adjusted qualified education expenses.
An American opportunity or lifetime learning credit (education credit) can be claimed in the same year the beneficiary takes a tax-free distribution from a 529, as long as the same expenses aren't used for both benefits.
This means that after the beneficiary reduces qualified education expenses by tax-free educational assistance, he or she must further reduce them by the expenses taken into account in determining the credit.
To shorten the answer, if you had $5000 in tuition and the 529 money paid for all of it NO CREDIT. If you had $5000 in tuition and the 529 money paid for $1000 then you could use the other $4000 for education credit.
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The amount you pay with the 529 is not going to be allowed for the credit too.
If the Staffords you site above are for loans then those amount are allowed. Federal Direct Sub Stafford 2,000 and a Federal Direct UnSub Stafford 1000 would be the only amounts you could use to claim education credits.
I hope that helps
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It does not matter that they are loans. That is money you paid yourself. The maximum annual credit of $2,500 per student is allowed.
The credit is claimed by you or if you are still a dependent by your parent.
It is based on income. so if you made less than $80,000 , or $160,000 or less for married couples filing a joint return the full $2500 is allowed.