529 distribution in December for January payment

[DoodleDawgSC]

First year college student and bill is being paid directly to the school via our 529 plan.  Student is the beneficiary.   All distribution is being used for qualified expenses.  However, the distribution for January 2019 semester came in December of 2018.   Ouch...does this cause a tax burden? Since the 1098 only lists one semester of tuition (first year student) .  Or can I simply note that I paid the whole tuition for the year in December?  Feeling stupid, but hoping I didn't mess up my child's tax burden!

[NCperson]

please read the link below

https://turbotax.intuit.com/tax-tips/college-and-education/what-is-irs-form-1099-q/L7MAdcKz5

and especially: 

Calculating taxable amount

If the distribution doesn’t exceed the amount of the student's qualifying expenses, then you don't have to report any of the distribution as income on your tax return. If the distribution exceeds these expenses, then you must report the earnings on the excess as "other income" on your tax return. When you pay a student’s school expenses with these funds, you cannot claim a tuition deduction or either of the educational tax credits for the same expense.

[DoodleDawgSC]

One last question:  I understand the information--thank you.   Please Clarify...since the distribution that arrived to the college in 2018 will be used to pay for 2019 expenses.  But since these expenses (although they will be qualified) are not listed for 2018, (form 1098-T box 1)) it shows that they have exceeded the qualifying expenses.  So Turbo Tax says they are taxable.  Can I simply change the amount of tuition from that reported on form 1098-T box 1 to reflect that I also pre-paid in 2018 for 2019?    Or is it truly CALENDAR year specific.   Thank you so much, I hope this makes sense.  Peace! 

[dhotop]

Is there an answer to this situation?  The same just happened to me.  The 529 sent a payment in December 2020, that was not received by the college until Jan 2021, so the 1099-Q & 1098-T are not in sync.

[KrisD15]

If you paid in 2020 for classes that started within the first three months of 2021, and the school did not reflect that payment in box 1 on the 2020 1098-T, use the "This is not what I paid" link under Box 1 on the 1098-T screen and enter the adjusted total. 

NEXT year, you may need to compensate by doing the same thing only SUBTRACTING the same amount from Box 1.

IRS Pub 970

[dhotop]

Thank you!!  Now I have two more questions.....

#1) My son receives a partial academic scholarship of $4k/semester, should I put in the full tuition amount, pre-scholarship since the $4k is later subtracted out in line 15 of Part 6 of the worksheet?

#2) What is line 17 ("Used for deduction or credit")  I have $10k showing up in this line and cannot find a source for where that is coming from.

[Irene2805]

To answer your questions:

1.  Yes - Put the full tuition amount listed on the 1098-T.  As you indicated, the scholarship amount will be subtracted later in the calculation.

2.  Line 17 instructions state:

If you have a distribution from a qualified plan, you might be better off using your education expenses to claim a tax credit rather than excluding from income the distribution from the plan. Enter on line 17 the amount that you choose to use for computation of a credit instead of an exclusion. For example, since the first $4,000 of qualified expenses may generate an American Opportunity Credit, you may choose to enter $4,000 in this field. The resulting tax credit may be more beneficial than the forfeited exclusion from income.
 

@dhotop