TurboTax treats 1099-Q as additional income when all distributions went to college expenses

Forum|Forum|4 years ago
February 19, 2022
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Any reason why TurboTax is treating a portion of the 1099-Q total as additional income? All of the distributions from the 529 plan were made for qualifying college expenses.

I've gone through the expenses a few times and the expenses exceed the 529 distributions (as shown on the 1099-Q).

PattiF

From MinhT1

There is no need to report Form 1099-Q on your tax return.

On form 1099-Q, instructions to the recipient read: "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.

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. Again, 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.

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