Grandparents had contributed to 529 plan for their grandson many years earlier. Grandson now in college. $ 35,463 in qualified tuition billed by and paid directly to by the 529 plan.

after working through the AQEE formula it appears that after taking into consideration a scholarship and the AOC, a portion of the earnings from the 529 distribution will be taxable.

Who gets taxed ? TTB 12-6 seems to say " the owner of the QTP unless the distribution was paid directly to the designated beneficiary or to an eligible institution for the benefit of the eligible beneficiary "

So the beneficiary (student) is not taxed ? Are the grandparents taxed ?