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February 5, 2025
Question

My son received a 1099Q for a $7K distribution from his 529 plan, which went directly to his Roth IRA. How do I enter this in Turbo Tax so it is not taxed?

  • February 5, 2025
  • 1 reply
  • 0 views
I have entered the 1099Q, but TurboTax is including the earnings portion of the distribution as taxable. Not sure how to indicate in Turbo Tax that this distribution went directly to his Roth IRA.

    1 reply

    SusanY1
    February 5, 2025

    The IRS instruction for reporting information on form 1099-Q tell us to only report information related to taxable transactions.  Therefore, the best way to handle this nontaxable transaction is to not report it in TurboTax at all.  You can remove the entry by following these steps:

     

    1. From any page inside of your return, click on TaxTools in the left panel, then Tools
    2. In the pop-up box select Delete a Form
    3. Look for the form you need to delete (1099-Q), and click Delete
    4. Confirm your choice, and continue to work on your return

     

    Keep the 1099-Q and the Roth IRA conversion information with your tax records so that they are easily accessible for at least three years, in case the IRS inquires about the transaction. However, the transaction should be reported in a way to the IRS already that won't cause any inquiry.  

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