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March 9, 2020
Question

1099-Q withdrawal 2019, 2020 tuition payment

  • March 9, 2020
  • 2 replies
  • 0 views

I withdrew tuition money on 12/31/2019 (thinking it would not get posted until 2020). The tuition payment was made in January 2020. How do I report this without paying taxes on the 2019 withdrawal?

 

Thanks

    2 replies

    March 9, 2020

    Unfortunately, 529 funds must be used to pay qualified education expenses in the same tax year the funds are disbursed. 

     

    If you do not have qualified education expenses to match the distribution in 2019, you'll have to pay tax and the penalty of the earnings portion of the withdrawal.

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    Hal_Al
    Employee
    March 10, 2020