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Question

How do you populate Form 5329 line 6 for taxable amounts related to a tax-free scholarship in TurboTax for distributions not subject to the 10% penalty?

Forum|Forum|5 years ago
March 30, 2021
1 reply
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TurboTax Premier Online

You need to enter your form 1099-Q and work through that section to have form 5329 populated. You can do that in TurboTax by following these menu prompts:

Deductions and Credits
Education
ESA and 529 qualified tuition programs (Form 1099-Q)

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My distribution from the 529 account was a refund due to a scholarship, so the amount should be taxed but not have an additional penalty. I can't find a way to get turbotax to remove the penalty (which would be by indicating that it is not taxable by entering the value onto line 6)

Employee

Follow these steps to enter the income (the programs vary a bit but this lets you know where you are going):

go to the federal income section
scroll to the bottom/ show less common income
Miscellaneous Income, 1099-A, 1099-C, Start
Scroll to the bottom
Other reportable income, Start
Other taxable income?
Select YES
Description
Amount, enter your amount
Continue

If you really did not have any other 529 qualified Room and Board and Qualified Education Expenses - Internal Revenue Service expenses then it is taxable income.

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