Entering 1099-Q 529 plan information that was all spent on tuition, room and board

Forum|Forum|4 years ago
January 23, 2022
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My 18yo full-time student dependent is below the $12,400/$1,100 thresholds and has no interest in doing his own return. How on my return in Turbotax do I enter his income and 1099-Q information, as the form from the 520 plan came in his name as the beneficiary even though I am the owner?

Hal_Al

Employee

Answered at your other post at https://ttlc.intuit.com/community/taxes/discussion/re-you-should-not-claim-your-child-s-w-2-or-self-employment/01/2410953#M860073

If he was the "recipient" of the 1099-Q (it's in his name an SS#)*, you may not enter his 1099-Q on your tax return.

Furthermore, it is not necessary to enter the 1099-Q on his return, either, since the entire distribution was used for tuition, room and board (qualified educational expenses). In fact, there is no place on any IRS form to enter anything about a 1099-Q, unless you determine that some of it is taxable.

The 1099-Q is just an informational document. Receiving a 1099-Q does not require your son to file a tax return.

*When you requested the distribution form the plan, you had the choice of sending the money to you. In that case you would have been the recipient and any tax consequences would go on your tax return. If you send the money to the student or to the school, the student-beneficiary is designated as the recipient.

Hal_Al

Employee

But, wait, there's more.

Were all your son's expenses paid by the 529 plan so that you are unable to claim a tuition credit? If so, you can still claim the credit (unless your income is too high) by having him declare some of the 529 distribution as income, freeing up tuition for you to claim the tuition credit. See the example at your other post

https://ttlc.intuit.com/community/taxes/discussion/re-you-should-not-claim-your-child-s-w-2-or-self-employment/01/2410953#M860073

Alternatively, if your student has scholarships, he can pay tax on them to free up tuition for the credit on your return. That technique is usually better than paying tax on the 529 distribution.

RobertB4444

A 1099-Q in your son's name doesn't need to be reported at all. It usually represents money paid directly to the school for tuition and fees. But you may want to do it in order to get the tuition credit. If your son has a 1098-T from his school for the year then you are entitled to the education deduction for him (if there is one to be had).

This article from TurboTax has a lot more information.

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