I understand that the amount rec'd in scholarships can be withdrawn penalty free (though taxes are still due from the owner or beneficiary on the earnings). But what about grants? Our student also rec'd a Pell Grant ($3448) and a Federal Supp Opportunity grant ($1000). Can either of these amounts be withdrawn from the 529 penalty free? Thank you.
Q.Our student also rec'd a Pell Grant ($3448) and a Federal Supp Opportunity grant ($1000). Can either of these amounts be withdrawn from the 529 penalty free?
A. Yes.
Grants are scholarships for ta purposes. When entering the 1099-Q and 1098-T in TurboTax, to claim the penalty exception, enter the amounts as scholarships (it not already included in box 5 of the 1098-T).
Enter your E-mail address. We'll send you an e-mail with instructions to reset your password.
©1997-2022 Intuit, Inc. All rights reserved.
Intuit,
QuickBooks, QB, TurboTax, ProConnect, and Mint are registered
trademarks
of Intuit Inc. Terms and conditions, features, support, pricing,
and service options
subject to change without notice.
Security
Certification of the TurboTax Online application has been
performed by
C-Level Security.
By accessing and using this page you
agree to the
Terms of Use.
Accessibility
