Question

1099q

Forum|Forum|2 years ago
March 10, 2024
1 reply
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I, the parent, received a 1099Q for distributions from a 529 fund. My daughter received the 1099T. The cost of her tuition was the exact amount of the distribution which totaled approximately $2,700. She had other expenses for books and a computer that were paid for out of pocket. How do I report on my return as well as her return? Also how does the American Opportunity credit come into play?

Not A Product Question

AmyC

Employee

The 1098-T will only go on your return. You want $4,000 of education expenses to claim the AOTC. Here is what you need to do.

Step 1: The 1099-Q

The 1099-Q for $2700 has to go towards room and board. Even students living at home have room and board expenses allowed. Check with the college to determine the qualified room and board for your situation.

Do not enter the 1099-Q at all, tuck it away. IRS Publication 970, Tax Benefits for Education states:

If the entire 1099-Q went to qualified expenses, room and board, tuition, etc then you do not need to enter the form. Tuition paid for the first 3 months of the next year also qualify, see page 12, What Expenses Qualify, and page 52 for qualified distributions.

Step 2: The 1098-T

Enter the 1098-T on your return so you can claim the AOTC. Use the tuition and books along with any other required items to claim the AOTC. It is only good for 4 years. See Qualified Education Expenses - Internal Revenue Service

Reference:

IRS Q & A about education credits

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