How do I specify that multiple student's education expenses were paid for with the distribution reported on my 1099-Q? Currently the software only allow specifying one.

Forum|Forum|3 years ago
January 27, 2023
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TurboTax Deluxe Online

Hal_Al

Employee

That's not allowed. A 529 plan or ESA has a designated beneficiary. A distribution from a 529 plan can only be claimed for that beneficiary's expenses.

You are allowed to transfer (rollover) money from one beneficiary's plan to another's. But you have to go thru that procedure before you can use the money for a 2nd student.

michaeljcampbellAuthor

Thank you for your reply.

This sounds like it may be an issue for the 529 provider to resolve then. I do in fact have two beneficiaries and two accounts but the 529 provider lumped both accounts in one 1099-Q.

Hal_Al

Employee

In that case, break the one 1099-Q into two separate 1099-Qs, when you enter them in TurboTax. Base the amounts, you enter, on your own records. What you enter is not sent to the IRS. It's only used to do the calculations.

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. But, it will prepare a 1099-Q worksheet for your records. 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!