I have a 1099-Q from my 529 provider with an earnings of $7,950 in Box 2. This was part of her Room & Board expense for the year. Where to put it ?

Forum|Forum|1 year ago
March 21, 2025
1 reply
0 views

Her 1098-T shows her Tuition amt and her Scholarship. Where do i enter this $ 7,950 as her Room & Board expense ?

KrisD15

Are you claiming her as your dependent?

Although you are only taxed on earnings, if the full distribution was not used for room and board (or other education expenses) the tax on the distribution will be based on a ration of earnings and basis.

You must enter the 1099-Q first into the TurboTax program. Afterwards, in the expenses section (Form 1098-T) room and board expense is an option for entry.

Until Form 1099-Q is entered, room and board is not offered since that expense does not qualify to be used towards a credit, nor to offset scholarships.

IRS Pub 970

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

bvijaykrAuthor

Thx for your reply. After i entered the 1099-Q, I was able to go back and then the Wizard for 1098-T showed Room & Board. This is a bad bug in the Turbo tax software. It shud ask if u hv a 1099-Q to enter before showing the 1098-T wizard entries. My daughter had more Room & Board expense of $10,800 compared to the $7950 that showed as earnings in the 1099-Q. Doe she still have to file a tax return for her 1098-T ? Initially, when I had not entered the 1099-Q, Turbo asked me to have my Daughter file a tax return for the 1099-Q Earnings amount of $7950. I am guessing she doesn't need to file a tax return for her 1098-T now as the Earnings is accounted for by her Room & Board expense. is that correct ?

KrisD15

Correct, if the program first suggested the student claim the distribution, but now the distribution is allocated to room and board, and if the room and board is as much or more than the distribution, the student needn't claim any income in regard to the 1099-Q.

If the student is claimed as your dependent on your return, and if Form 1098-T Box 1 is larger than box 5, you would enter it for a credit.

If Form 1098-T shows more in box 5 (scholarships) than in Box 1 (tuition paid to the school) the student may need to enter Form 1098-T on their tax return to report the income. Of course Books and Supplies would also need to be accounted for.

I assume the programmers don't offer room and board until after Form 1099-Q is entered because that expense cannot be used for a credit and people would be asking why room and board is an option when it doesn't matter.

The Education section is very complicated because payments and expenses can be allocated in order to get a credit.

For example, if tuition was 5,000 and the distribution was 5,000, the program may suggest the student claim 4,000 so that the person claiming the student gets an education credit. Usually the credit is worth more than the tax and often the student doesn't meet the filing requirements and therefore there is no tax at all and still the taxpayer claiming the student gets the credit.

After entering the room and board, you can go back through the interview and select "Maximize my tax break" to see if the program is still suggesting the student claim any income.

You can type letme into the search to see if an education credit is being claimed and how much in expenses is being used for a credit. (you can also change it here as well)

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