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February 28, 2021
Question

If form 1098-T included tuition expenses that were reimbursed should I enter the full amount on my tax return or only the portion that was not reimbursed by a 529 plan?

  • February 28, 2021
  • 1 reply
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The amount that was not reimbursed is over $4000, so I know that will qualify us for the American Opportunity Credit. I just want to enter the information correctly.

1 reply

Hal_Al
Employee
February 28, 2021

Technically, the answer is: you should enter the full amount and let TurboTax do it's calculations.  Enter the 1099-Q before you enter the 1098-T.

 

But if you know that your 1099-Q is fully covered by expenses, and there is $4000+  left over for the American Opportunity Credit, you can save yourself some effort: don't enter the 1099-Q at all.  You are not required to report it. It is only an informational document.

 

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..

On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution." 

 

When you enter the 1099-T, you can enter it as received, knowing that TurboTax will only use $4000 or you can reduce it for the 1099-Q (box 1) amount.  That shouldn't be necessary, as room & board, books and computers are also qualified expenses for a 529 distribution, even if you live off campus.