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Level 2

College Student on Turbo Tax

We are preparing our son's tax return.  He is a full time college student and we  claim him as a dependent on our tax return.  He had some employment income last year.  He also had a 1099-Q from his 529 plan, with all of that cash used to pay tuition, for which he has a 1098-T.  The problem is that when we prepare his tax return, he is getting taxed on the 529-Q earnings because we said he is being declared as our dependent.  What should we do?

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Employee Tax Expert

College Student on Turbo Tax

Since he is a dependent on your tax return you enter the 1099-Q on your return, the it is offset by the qualified education expenses paid.  Please see this FAQ for more help.