How do I handle the 1099Q that I received reporting a 529 distro to ROTH IRA

Forum|Forum|1 year ago
March 10, 2025
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I asked this question yesterday but got no response - During 2024 my daughter, the 529 plan beneficiary used $3,000 remaining in the 529 plan to add the $3,000 to her ROTH IRA. I, her parent as the 529 owner received the 1099Q from the financial broker who sent the $3,000 check directly to my daughter. It appears that the expert advice is just to keep the 1099Q that I received in my tax file but not enter it into TurboTax when doing my takes. Is this correct and if not what should I do?

Best answer by AmyC

You should have proof of the qualified rollover with your 1099-Q tucked safely into your tax folder. If you put the Q into the program, it won't go on our tax return since nothing is taxable. The IRS gets the forms, not the program.

The IRS will never see it reported so there isn't any good reason to waste time entering it into the program.

Officially, IRS Publication 970, Tax Benefits for Education states:

Any amount distributed from a QTP isn't taxable if it's rolled over to:

A Roth IRA for the benefit of the same beneficiary, if the distribution is a direct trustee-to-trustee transfer from a QTP account that has been open for more than 15 years and the amount distributed does not exceed total contributions (and attributable earnings) made to the QTP more than 5 years before the distribution date. However, this doesn't apply to the extent the amount distributed when added to other amounts contributed to Roth IRAs exceeds the annual contribution limit. For more information about contributions to Roth IRAs, see Pub. 590-A.

AmyCAnswer

Employee

The IRS will never see it reported so there isn't any good reason to waste time entering it into the program.

Officially, IRS Publication 970, Tax Benefits for Education states:

Any amount distributed from a QTP isn't taxable if it's rolled over to:

A Roth IRA for the benefit of the same beneficiary, if the distribution is a direct trustee-to-trustee transfer from a QTP account that has been open for more than 15 years and the amount distributed does not exceed total contributions (and attributable earnings) made to the QTP more than 5 years before the distribution date. However, this doesn't apply to the extent the amount distributed when added to other amounts contributed to Roth IRAs exceeds the annual contribution limit. For more information about contributions to Roth IRAs, see Pub. 590-A.

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