Question

1099-Q related question

Forum|Forum|2 years ago
March 30, 2024
1 reply
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Thank you in advance for any useful advice on this issue.

Here's the situation and then the question: I'm the recipient (trustee) of my two kids' 529 plans (each has his/her own plans). While one kid is still a dependent and I claimed under me and my wife's joint filing, the older kid doesn't qualify as a dependent, at least from tax purposes (not in reality). When completing the 1099-Q info asked in my older (non-dependent) child's tax return, TT said the recipient (i.e., me) owes taxes on that 1099-Q withdrawal. Here's the question: I'm not sure where do enter that info (earnings from the older child's 1099-!) in my tax return; your help is appreciated.

Please note that all withdrawals are qualified and were used to pay for my child's college expenses (was not enough but still very helpful).

Thank you!

Best wishes,

-Sanjib

AmyC

Employee

Do not enter the form. Tuck it into your tax folder.

IRS Publication 970, Tax Benefits for Education states:

If the entire 1099-Q went to qualified expenses, room and board, tuition, etc then you do not need to enter the form. Tuition paid for the first 3 months of the next year also qualify, see page 12, What Expenses Qualify, and page 52 for qualified distributions.

Page 45 repeats: Don't report tax-free distributions (including qualifying rollovers) on your tax return.

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S

Sanbhu 12Author

Thank you very much! Appreciated for the quick response.

TT is very good at guiding "civilian" users like me who looks at tax only when it is this time of the year, but I still find TT's explanations of many tax-related items (e.g., 1099-Q) very confusing and full of legal jargons! Not surprisingly, I've reported 1099-Q last year (not sure why, I didn't think about reaching out to the community last year)! Additionally, I also forgot to report my kids' college expenses which were larger than the 529 used for their qualified expenses. Oh, well.. too late now.

Thank you again!

Best wishes,

-Sanjib