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Question

I cannot continue my Federal Taxes (QTP)

Forum|Forum|6 years ago
January 22, 2020
34 replies
0 views

So I am a Grad Student with a 529 College Savings Account, and I already entered in my 1099Q form under my income. After I finished up with my W-2s and my credits, I am approached by a page stating: "Other Income Statement: Qualified tuition program distributions - Taxpayer - You can't file just yet due to a recent law passed by Congress". And it's telling me to review my distributions which I had already entered, and I checked that they are correct. What Law?! Why can't I submit my taxes now, when I already have all of my documents ready?

Is anyone else experiencing this, because I would love an explanation. Also what did Congress even do?

TurboTax Free Edition Online

Hal_Al

Employee

"entered in my 1099Q form under my income"

The 1099-Q should be entered at Deductions and credits/ education, not in the income section.

The SECURE act, signed 12-20-19 allows 529 plan money to be used for student loan payments. Even though you may not be affected, the program is. https://www.savingforcollege.com/article/new-law-allows-529-plans-to-repay-student-loans

Alternatively; 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. 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 cannot double dip! 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, in case of an IRS inquiry.

StahlwittchenAuthor

Hi,

Thank you for your information. I took my 1099Q info out from income and put it under Deductions. However, TurboTax is not allowing me to enter in cent amounts for each of the three boxes, same as when I tried it before. So I rounded (again), and I am still being hit by the QTP page under the Federal Review.

I don't want NOT to report it, as I would rather not have any issues with the IRS. Box 1 ends in (.56 cents), Box 2 ends in (.29 cents), and Box 3 ends in (.27 cents). Since TurboTax isn't allowing me to enter in the most accurate amounts, could this be the reason why I am still being hit at the end of my Federal Review?

Hal_Al

Employee

when you use rounding you have to be sure the box 2 and box 3 amounts add up to the box 1 amount. So, in your case round 29 cents (box 2) up. Round box 2 (rather than box 3) since box 2 is earnings (the potentially taxable portion).

jnh

I have a similar issue but not the same:

During the review process I get the following screen message:

"Other Income Statement: Qualified tuition program distributions - Spouse - You can't file just yet due to a recent law passed by congress. This means a better outcome for taxpayers like you who have taxable QTP distributions. We can keep working on your tax return and we'll let you know when we can help you finish up you taxes.

That's nice but the 1099-Q was the last thing I needed to file my taxes so it is the only thing holding it up. TurboTax - please issue this change ASAP; "well let you know" is not precise enough. ty

Hal_Al

Employee

It's an IRS hold up not TurboTax.

StahlwittchenAuthor

It would just be nice for them to state when I will be able to complete my taxes.

alundy

Same situation here. Any idea what we can do about this or when it will be resolved on TT.

Bjmv98

Thank goodness I'm not the only one!!! I spent 5 hours doing my taxes just to finish and have this same issue.

I'm hoping they give us an estimated time to have this fixed

jamiekimry

I have the same issue, and contacted TurboTax. I spoke with a representative who also was unaware of the situation, and could not help me resolve it. He also did tell me that you are not allowed to file State now without filing Federal and it being accepted. Although I was hoping to at least submit state to get a portion of my refund quicker! He had no idea as far as timeline that the form would be ready, and could not find any info on the IRS site. He suggested I wait until after January 31st to try again...

KathrynG3

If the form does not apply to you, you can delete it by going to the lower part of the left navigation pane to Tax Tools>Tools>Delete a Form

Select Federal and then Deductions & Credits.
Scroll down to the Education section under All tax breaks.
Select, Show more and select Revisit next to ESA and 529 qualified tuition programs (Form 1099-Q).
Continue
Select the Trash can icon to Delete

@Stahlwittchen you said you were a Grad student. Did you also have a stipend? It is reported differently than income from Wages.

StahlwittchenAuthor

@KathrynG3

I am using a 529 Plan to pay for school, which is why I got the 1099Q form. Just distributing the money to my bank and then paying my school, that is it. I am not paying students loans nor do I have a stipend.

I have been convinced that I NEED to include my 1099Q form on my taxes, as it may be taxable but I have absolutely no knowledge of that.

Is it possible that I can just delete them from my e-file taxes on here and then mail them in by hand if needed?

melron963

You could always delete the 1099-Q form from your return so you can transmit your return without the error. This will at least get things going so your refund is not delayed. Periodically check for updates in TurboTax to see if the error is fixed. When it is then file an amended return.

LindaB1993

The 1099-Q should be entered at Deductions and credits/ education, not in the income section.

The SECURE act, signed 12-20-19 allows 529 plan money to be used for student loan payments.

Even though you may not be affected, this area in the TurboTax program has not been updated. Once IRS finalizes and send the approval, you will be able to electronically transmit your returns

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

splitfinger09

Even if the distribution was not used for a qualified expense?

splitfinger09

I am getting the same error as well. Please help!! My earnings were not used for a qualified expense so I definitely need to report them on my taxes.

kcwinz

My 529 plan withdrawal was not qualified and my student loan interest payments exceed the value of the withdrawal amount. Meaning, even if I could, I wouldn't use it. I have no intention or desire to use any of that amount as a deduction. So, why will TurboTax not let me e-file? If I can print a copy and mail it in, why is that same data not valid for e-filing?

5campers

The tax change allows for up to $10, 000 to be paid from 529 towards total student loan payments, not just interest. So if you took a $3,000 529 distribution and paid $3,000 towards student loans, you can do so penalty and tax free.

mitsu763

From what I can tell, TurboTax is telling me the gains of my son’s 529 are taxable even though the funds were used for tuition and books. Is there maybe a workaround for this?

candie1971

I'm getting the same message and I selected these funds were not part of educational expenses. I think what they are trying to do is get you to pay additionally for the live help.

schoultz62

That would be a shame. I've been using turbo tax for years and this is the first time I've had any issues with them. This is my fourth year of filing with gains from my QTP. Hopefully this will be resolved soon. I wonder if any of the other tax programs have this issue right now?