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Level 1
posted Feb 21, 2026 7:24:45 AM

1099-Q Non-qualified distribution

I withdrew an amount from my 529 plan to pay for my daughter's wedding, knowing there would be a tax penalty. How do I enter a Non-qualified distribution in my TurboTax filing?

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1 Best answer
Alumni
Feb 21, 2026 7:41:52 AM

In TurboTax (TT), enter at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

-Scroll down to:

--Education

  --ESA and 529 Qualified Tuition Programs (1099-Q)

 

Follow the interview. Since there will be no expenses entered, TT will treat it as  a non qualified distribution including the 10% penalty.  Only the earrings (box 2 of the 1099-Q) will be taxed and subject to the 10% penalty.

 

There is currently a glitch in TT when entering expenses. But that shouldn't affect you. 

2 Replies
Alumni
Feb 21, 2026 7:41:52 AM

In TurboTax (TT), enter at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

-Scroll down to:

--Education

  --ESA and 529 Qualified Tuition Programs (1099-Q)

 

Follow the interview. Since there will be no expenses entered, TT will treat it as  a non qualified distribution including the 10% penalty.  Only the earrings (box 2 of the 1099-Q) will be taxed and subject to the 10% penalty.

 

There is currently a glitch in TT when entering expenses. But that shouldn't affect you. 

Level 1
Feb 21, 2026 8:29:02 AM

Thanks so much!