Question

1099-Q Earnings being

Forum|Forum|4 years ago
March 23, 2022
1 reply
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We paid my child's tuition directly to the university and were reimbursed by our 529 plan.

The 1099Q form we received shows me as the recipient and it also indicates that I am not the beneficiary,

When I enter myself as the recipient in Turbo Tax, and my son as the student, it incorrectly treats the earnings portion of the disbursement as taxable.

1. Why does the 1099-Q even have to be entered in Turbo Tax ? The instructions for the 1099-Q form specifically state that non-taxable distributions are not required to be reported on your income tax return.

2. When I do enter the 1099-Q information, why is Turbo Tax treating the earnings as taxable ?

M

MinhT1

If your distribution from the 529 plan is entirely used for education expenses (including room and board), you are not required to enter the form 1099-Q on your tax return.

You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. Again, you cannot double dip! When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records, in case of an IRS inquiry.

On form 1099-Q, instructions to the recipient read: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution."

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