Where do I enter room and board expenses for college? The 1098-T section only asks about tuition. 1099-Q section is no help either.

Forum|Forum|2 years ago
March 4, 2024
2 replies
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When I enter the 1099-Q info, TT is saying that we have $8500 of taxable income, but it clearly has not taken into account nearly $13K of room and board (because there has been no prompt to enter the room and board). All 529 distributions were to my child and there were no scholarships. We do not qualify for the AOTC or LLC due to income. By my offline calculations, our AQEE is about $760 less than the gross distribution resulting in about $326 of taxable income for my child. Should I just delete all of the 1099-Q and 1098-T information from TT? I have read several things that TT does not handle this correctly.

TurboTax Deluxe Online

Hal_Al

Employee

Q. Should I just delete all of the 1099-Q and 1098-T information from TT?

A. Yes, if you know none of it is taxable.

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!

References:

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."
IRS Pub 970 states: “Generally, distributions are tax free if they aren't more than the beneficiary's AQEE for the year. Don't report tax-free distributions (including qualifying rollovers) on your tax return”.

That said, To get the screen to enter Room & Board, answer yes when asked if you have book expenses, in the 1098-T and educational expenses section. To get the R&B entry box, you must have entered the 1099-Q prior.

If the $326 is the student's only income, it would appear to be under the filing requirement ($1250 of unearned income). But, since the 10% penalty applies, he will need to file a return.

Jeff_HAuthor

@Hal_Al - Thanks? The question mark is because your answer talks about things that contradict what I shared. For example I said there were no scholarships. And that we don't qualify for the education tax credits. And that the AQEE was slightly less than the distribution. Therefore, there is a taxable earnings implication. So the fact that you said Yes, just delete all the the 1099-Q and 1098-T information from TT is perplexing. Did you say this because you are AI or because all of the distributions were to my child?

On the other hand, I was finally able to get to a screen that allowed me to enter the Room and Board on a separate line by following the navigation that you mentioned in the last two sentences. So that part helped! I don't know why TT wasn't showing that previously despite trying various sequences (1098-T first then 1099-Q and vice-versa) and even deleting those sections and re-doing them.

AmyC

Employee

The forms should be entered where they are taxable. If they both went to the student, then the student claims the income rather than being on your return.

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