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June 6, 2019
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If I made a non qualifying withdrawal from a 529 account. will TT help me for paying the penalty?

  • June 6, 2019
  • 1 reply
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Best answer by LindaA

Yes, TurboTax will calculate the penalty for you. 

A distribution from a 529 plan is reported on a Form 1099-Q. Earnings from the plan are not subject to federal tax when used for the qualified education expenses of the designated beneficiary, such as tuition, fees, and books, as well as room and board. See 529 Plans Questions and Answers for more information.

During the 1099-Q interview, TurboTax asks Who's the student? Select This distribution was not used to pay any education expenses and continue with the interview.  (Click the screenshot below to enlarge it for reference.) TurboTax will calculate the additional tax (penalty) and include it on line 59 of Form 1040. 


The FAQ below tells how to enter a 1099-Q in TurboTax.  https://ttlc.intuit.com/replies/5113308

1 reply

LindaAAnswer
Employee
June 6, 2019

Yes, TurboTax will calculate the penalty for you. 

A distribution from a 529 plan is reported on a Form 1099-Q. Earnings from the plan are not subject to federal tax when used for the qualified education expenses of the designated beneficiary, such as tuition, fees, and books, as well as room and board. See 529 Plans Questions and Answers for more information.

During the 1099-Q interview, TurboTax asks Who's the student? Select This distribution was not used to pay any education expenses and continue with the interview.  (Click the screenshot below to enlarge it for reference.) TurboTax will calculate the additional tax (penalty) and include it on line 59 of Form 1040. 


The FAQ below tells how to enter a 1099-Q in TurboTax.  https://ttlc.intuit.com/replies/5113308

June 6, 2019
what if the non-qualified distribution is made for a student attending a military academy?  no penalty should be calculated and there is no option to get around this on turbo tax.