Question

Is my 1099-Q triggering my need to fill out form 8615?

Forum|Forum|4 years ago
March 31, 2022
1 reply
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I am 19 and started college last August. My parents are claiming me as a dependent so Turbotax said I couldn't get my education deduction from my 1098-T. My 1098-T shows my scholarships and grants but I can't use the form. So I didn't think the 8615 was showing up because of that. Is it because of my 529 disbursement? Also when it brings up the form it is mostly filled out, and I have no idea where it got the numbers it filled in. They don't seem correct, especially the box that says my taxable income. That box is showing a number way off from the number on my W-2.

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J

JillS56

No, the 1099-Q would not be triggering Form 8615. Form 8615 is used to calculate taxes on certain children's unearned income. Unearned income typically refers to investment income such as interest, dividends, capital gains, and rental income.

The reason you cannot claim the 1098-T is that your parents are claiming you on their taxes. Also, if a disbursement was taken from a 529 Plan and you received both a 1099-Q and a 1098-T, you may not even be eligible for the education credit. If the 1099-Q is at least as much as your tuition less any scholarships you received, you would not get an education credit. Both the 1098-T and 1099-Q are forms that do not have to be claimed on your taxes.

The tuition credit goes to the party claiming the exemption (dependent). Since you are claiming your daughter you can claim the college tuition/expenses for your daughter on your return. This link talks about the requirements for you to claim your daughter on your tax return Dependent Requirements.

As for the funds she received from her 529 Plan, you can only claim college tuition/expenses on the amount that exceeds the distribution from the 519 Plan.

Funds distributed from a 529 Plan, will be reported by the bank on Form 1099-Q. The 1099-Q is sent to the owner/recipient of the 529 Plan funds. The Form 1099-Q is to be reported as income if they were not used to pay qualified college tuition/expenses. If the amount reported on the 1099-Q were used to cover qualified college tuition/expenses you do not need to report the income. If the amount exceeds the amount of college tuition/ expenses then the excess needs to be reported as other income on your 1040.

Here is an article that talks about What is IRS Form 1099-Q.