1099-q

Forum|Forum|5 years ago
February 20, 2021
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Hi, I received a 1099-q from my state 529 plan, I am the beneficiary and I used the money to pay off my student loans. Do I need to report the 1099-Q on my taxes? I input the 1099-q info under Misc. Income and I also input it under 529 education deductions. I know I screwed up somewhere because now I don't qualify for the $250 educator expense credit. Thanks, in advance, for your help!

Hal_Al

Employee

Q. Do I need to report the 1099-Q on my taxes?

A. No, if all the proceeds were used for qualified educational expenses. Paying student loans is a qualified expense. You can withdraw a lifetime maximum of $10,000 to pay down student loan debt.

On form 1099-Q, instructions to the recipient reads: "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."

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.