1099-Q box 6 was checked in the letter I received but I am the designated beneficiary

[pqd1991]

I have a 529 plan in state of Illinois under Bright Start. I am a part-time MBA student and I put 10k on my 529 account. The beneficiary is myself. I pulled all the money out of my account to pay my tuition. I received the 1099-Q letter, but the box-6 was checked. However, I am the recipient and I am also the designated beneficiary on my 529 account. What should I do when I file my tax through turbotax, should I leave the box uncheck or should I check that box?

Thanks!

[Hal_Al · Accepted solution]

Yes, leave the box unchecked.

Or better yet, just don't enter the 1099-Q. 

You can just not report the 1099-Q, at all, if you (or your student-beneficiary) has sufficient educational expenses, including room & board (you must be half time or more for R&B to be qualified expenses for 529) to cover the distribution. When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records. You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. You also cannot count expenses that were paid by tax free scholarships. You cannot double dip! 

On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution." 

[pqd1991]

Thank you! There is another question regrading to my state Illinois tax return. TurboTax asked me two questions:

1. College Savings and prepaid Tuition plan contributions

2. Distributions from college savings plans.

In 2020, I put 10,000 into my plan and I withdraw all of them, so I typed in 10,000 in both of the questions. It seems my income was deducted twice according to TurboTax's calculation, which I think is not correct. How should I change my answer to those questions? Thank you!

[Hal_Al]

You may want to ask a whole new question to try to get an Illinois expert.