1099-Q - Recipients name is Account Owner, not Student

Forum|Forum|5 years ago
February 22, 2021
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In 2020, I paid for my daughters off campus housing using a Credit Card. I then requested distribution of 529 funds to cover cost of housing, paid directly back to me, (Account owner). I have all documentation in hand to verify the expense. I have since received several 1099-Q's for 529 Education withdrawals for CY2020, however one of the forms is reflecting me, the account owner, as the recipient of the distribution. When I enter this particular 1099-Q into Turbo Tax as instructed, the system is taxing me on the distribution. This is clearly a qualified distribution (housing), but when I enter form 1099-Q as instructed, it seems it's being treated as a non-qualified distribution. Can someone clarify how I should enter this form's information into Turbo Tax as a qualified distribution, rather than a taxable distribution? The 1099-Q form does include the "beneficiaries" account number.

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Hal_Al

Employee

Do not enter the 1099-Q, at all, since the distribution is fully covered by qualified expenses.

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.

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."