Does the IRS send me a bill for taxes and penalty due for a 529 withdraw overage or does Turbo Tax do the math and deduct it from my refund? Who pays, me/owner or my son?

[meyer385]

On the form view of my tax return, I can see that amount of 529 income that is taxable, also I see the amount that is taxed at 10% penalty. Turbo tax is telling me that my son (beneficiary) must claim this taxable income. How does he do this? The 1099Q is in my name not my son's.

[FaithY]

It depends. The person who receives the funds (whose social security number (SSN) is on the 1099-Q) has to report the Form 1099-Q on their tax return. If your son's SSN is on the 1099-Q he should file a tax return and report the 1099-Q. If the money went straight to the school, it is treated as if the funds went to the student. Any taxes and penalties due that result from a 529 plan withdrawal overage are calculated on your personal tax return. The information is entered in TurboTax, and TurboTax does the math.