Education Coverdell Distribution and qualified Education Expenses

Forum|Forum|4 years ago
May 17, 2021
1 reply
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Coverdell Distribution not reduced by all education expenses. 1099-Q worksheet only shows a portion of the entered expenses in the "For purposes of Regular Tax" line 5, "Enter the amount of adjusted qualified education expenses attributable to this ESA."

Hal_Al

Employee

The TurboTax interview is complicated.

You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the 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. You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. You also cannot count expenses that were paid by tax free scholarships. You cannot double dip!

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."

JMTaxAuthor

I found in the Student Info Wk that is put in 10,000 on line 17 Used for credit or deduction. Could I zero that out on the form as I don't know where that is coming from. Otherwise I do think I will just not include it as you suggest.