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Solved

1099-Q and 1098-T

Forum|Forum|6 years ago
February 6, 2020
5 replies
0 views

I am always confused as to whose taxes to claim these on. My college age son is a full-time student and had very little income so we claim him as a dependent on our taxes. Do I enter the 1099-Q on his tax return and the 1098-T on ours? Or do I do it all on ours? Both forms came in his name; however, we are the ones who paid the expenses from a Qualified Education Program that we started for him. Thanks for any clarification!

Best answer by TomK2023

The 1099-Q is reported on the recipient's tax return (the person whose Social Security number is on the form). If the funds went directly to the school, consider the student as the recipient, and if the student is your dependent, you should enter the 1099-Q on your return.

Here's how to enter your 1099-Q in TurboTax:

Open or continue your return.
Select Federal and then Deductions & Credits.
Scroll down to the Education section under All tax breaks.
Select, Show more and select Start or Revisit next to ESA and 529 qualified tuition programs (Form 1099-Q).
Follow the screens to enter your info.

If you're using the mobile app, go here for mobile-specific instructions.

To enter Form 1098-T:

Open or continue your return, if you're not already in it.
Search for 1098T and select the Jump to link at the top of the search results.
Select Yes on the Do you want to enter your higher education expenses? screen.
On the Your Education Expenses Summary screen, select Add A Student.
Select the name of your student (this could be you, your spouse, or a dependent) and Continue.
Answer some questions about the student and then you'll reach the Did [student] get a 1098-T from [school] for 2019? screen. Select Yes and Continue.
Enter the information from your 1098-T on the next screen. When you're finished, select Continue.

After you enter your 1098-T, we'll ask some additional questions, including whether the student had other expenses (books, supplies, equipment) and financial aid.

Here's some important info you need to know about Form 1098-T:

If the student on the 1098-T is your dependent, enter the 1098-T on your return, even if your dependent paid the tuition.
If you're the student on the 1098-T and you aren't being claimed as a dependent, enter the 1098-T on your return unless your employer paid for or reimbursed your tuition (in which case just keep the 1098-T with your tax records).
Enter your 1098-T exactly as is even if the amounts are wrong (this is common). Don't worry, we'll give you the opportunity to correct the info and/or enter more expenses later.
Leave blank boxes blank. Don't enter 0 for any blank boxes on the form, as this generates errors.

TomK2023Answer

Here's how to enter your 1099-Q in TurboTax:

Open or continue your return.
Select Federal and then Deductions & Credits.
Scroll down to the Education section under All tax breaks.
Select, Show more and select Start or Revisit next to ESA and 529 qualified tuition programs (Form 1099-Q).
Follow the screens to enter your info.

If you're using the mobile app, go here for mobile-specific instructions.

To enter Form 1098-T:

Open or continue your return, if you're not already in it.
Search for 1098T and select the Jump to link at the top of the search results.
Select Yes on the Do you want to enter your higher education expenses? screen.
On the Your Education Expenses Summary screen, select Add A Student.
Select the name of your student (this could be you, your spouse, or a dependent) and Continue.
Answer some questions about the student and then you'll reach the Did [student] get a 1098-T from [school] for 2019? screen. Select Yes and Continue.
Enter the information from your 1098-T on the next screen. When you're finished, select Continue.

After you enter your 1098-T, we'll ask some additional questions, including whether the student had other expenses (books, supplies, equipment) and financial aid.

Here's some important info you need to know about Form 1098-T:

If the student on the 1098-T is your dependent, enter the 1098-T on your return, even if your dependent paid the tuition.
If you're the student on the 1098-T and you aren't being claimed as a dependent, enter the 1098-T on your return unless your employer paid for or reimbursed your tuition (in which case just keep the 1098-T with your tax records).
Enter your 1098-T exactly as is even if the amounts are wrong (this is common). Don't worry, we'll give you the opportunity to correct the info and/or enter more expenses later.
Leave blank boxes blank. Don't enter 0 for any blank boxes on the form, as this generates errors.

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CarpAl2020

I'm sorry--this isn't clear to me: "The 1099-Q is reported on the recipient's tax return (the person whose Social Security number is on the form). If the funds went directly to the school, consider the student as the recipient, and if the student is your dependent, you should enter the 1099-Q on your return."

So does the final part of the last sentence (after the comma) stand on its own? If the student is my dependent, do I enter the 1099-Q on my own return regardless of other factors? Payment did go directly to the school in my case, but the 1099-Q does not reflect this.

TurboTax prompts me to enter my son's 1099-Q on my own taxes even though he files his own returns for his own very modest income. The 1099-Q and 1098-T are both in his name and SSN. But he *is* my dependent. So it seems like the rule may be: if the student is the dependent, enter the 1099-Q on the parent return.

Do I have this right? THANK YOU

NCPERSON1

whose social security number is on the 1099Q - THAT is who is to report it.

if 529 administrator sent the money directly to the school (or to the student), the STUDENTs social security number should be on the 1099Q. The IRS knows what happened to the money is the theory.

if the 529 administrator sent the money to the parent, the PARENT's social security number should be on the 1099Q. The IRS doesn't know the ultimate destination of where the money went is the theory.

for the 1098-T, it's not straight forward. if Box 1 exceeds Box 5, the form goes on the PARENT's return. If Box 5 exceeds Box 1, the form goes on the STUDENT's return (as this is taxable income to the student, but it is possible the student tax situation doesn't require him to file a tax return, in which case the 1098-T just goes in a drawer and is not reported anywhere.

does that help?

NCPERSON1

simple

1099Q goes on the tax form of the taxpayer listed on the form: Whose Social security number is listed?

1098-T ...if Box 1 is greater than Box 5, it goes on the parent's tax return ; otherwise the dependents.

Carl11_2

Employee

@NCPERSON1 just an FYI

1098-T ...if Box 1 is greater than Box 5, it goes on the parent's tax return ; otherwise the dependents.

That's not always true. You can't tie that to the 1098-T alone. Remember, it's perfectly possible and does happen quite a bit, where there are education expenses paid that were not included in box 1, as well as scholarships received that were not included in box 5. So you can't use the 1098-T alone to determine who reports the education stuff.

If the student received scholarships that are not include on the 1098-T, thus making the total of all scholarships received greater than all qualified education expenses paid, then the student will report all education expenses on the student's tax return.

Hoosierina

I think I did something stupid. Took a 529 distribution in July to pay for Fall ‘19 college tuition bill for my daughter. Then end of December, took another distribution to pay for Spring ‘20 semester, however both are showing up on 2019 tax statement, effectively losing me the tax credit. Institution didn’t get the check until 2020. Is there anything I can do to only claim the amount used for fall ‘19 and save other distribution for ‘20 taxes?

MAK70

You cannot technically move the distribution forward to 2020 because you took it in 2019 but you can "shift" the 2020 payment back by decreasing the amount in 2020. The most important thing is that you do not double count the expenses or credit and follow the rules.

@Hoosierina

i20000

Hello,

I would appreciate if somebody can help me. In my case I received 1099-Q in my name while the 1098 -T is in my daughter's name since she attended the graduate school. Moreover she is not a dependent on my tax return.

Under these conditions when I enter the forms 1099-Q and 1098-T my Federal Tax due bill increases significantly since TurboTax thinks I got the 529 distribution though in reality I paid this distribution for my daughter's graduate school tuition payment.

I am in the process of completing the returns and now stuck up.

Any help will be greatly appreciated.

Thanks

KathrynG3

If you provide more than 50% of your son's report, then he is still a dependent. You are correct, in general, college students without significant earned income are not included in the stimulus payments.

Your 529 plan fund distributed to your son, the beneficiary, in your son's name, are still coming from your plan. See: What does "financially support another person" mean?

Click the link for more guidance for entering: Form 1099-Q. and Form 1098-T.

@madmanc20

madmanc20

@KathrynG3

Thanks for the clarification. Very helpful. I'd imagine 529 plan owner (typically parents) is the clearest indicator this is not child's $ to meet their financial support. But some CPAs seem to want to interpret otherwise to gain educational credit and Covid stimulus.

I have a further question just to clarify all the details. Even if a college student have significant earning (Say a high paying summer internship) but the earning is not put towards their financial support (say they just put it in a bank or investment account), then they are still > 50% support from someone else that can claim them as a dependent. Correct?

LenaH

Yes, that is correct. They would qualify as your dependent under the qualifying child rules as long as they didn't provide more than half of their own support for the year. It is allowed for qualifying child dependents to earn income. Furthermore, they must be under the age of 24 (as a full-time student) and can not file a joint return with their spouse, if applicable.

@madmanc

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