Help with 1099-Q and dependent school expenses

Forum|Forum|4 years ago
February 20, 2022
2 replies
0 views

I received a 1099-q for a distribution for some of my dependent's Pre-K school expenses. This is my first experience with a 1099-q, but there appear to be some inaccuracies on the form I received. I am listed as the beneficiary on account, but box 6 is not checked. Also, under box 5, the distribution claims it was for a state program, but it was for a private school. Do I need to contact the trustee to get these corrected? Thanks.

JillS56

Yes, if there are discrepancies on the 1099-Q, I would go back to the payer and ask your questions and talk to them, and if necessary have them provide you with a 1099-Q.

Hal_Al

Employee

Q. Do I NEED to contact the trustee to get these corrected?

A. Need? No. Should? Probably.

You are (apparently) shown as the "recipient". So you, the owner, have to report the distribution, rather than the pre school beneficiary having to fil a tax return.

But, you have a much bigger problem. 529 plans can only be used for K-12 (or post secondary) education. Pre-K school expenses are not eligible. You have a non qualified distribution.

Reference: https://intrepideaglefinance.com/blog/can-a-529-plan-pay-for-preschool , which says, in part:

"The expanded provisions of 529 plans do not apply to preschool, pre-K, or any other educational opportunity that happens before kindergarten. The revised rules are very specific to K-12 as the only “pre-college” exception. Unfortunately, tuition and fees for private preschool is not included. "

If the distribution was taken after December 22, you can still put it back (a rollover) within the 60 days allowable.