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New Member
posted Feb 16, 2026 1:45:32 PM

529 distribution

I don't see anywhere in TT to enter expenses to offset the 529 distribution amount.  This is a different interview than last year.  The result is I'm being taxed on what should be a non-taxable distribution.  Help!

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3 Replies
Level 15
Feb 16, 2026 1:51:39 PM

If all of your withdrawal on 1099-Q was used for qualified education expenses then you don’t have to enter that form on your return at all. 

Alumni
Feb 16, 2026 2:48:40 PM

You can't enter those room and board expenses yet. This is a known glitch in TurboTax (TT). They are working on it (no announced fix date).   The 2025 education and 529 sections appear totally redesigned, from last year.

 

The 1099-Q is  only an informational document. The numbers on it are not required to be entered onto your (or your student's) tax return. The interview is complicated and it's easy to make mistakes. Avoid it if you can and you probably can. 

You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) 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 don’t need it). 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.

References:

  1. 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." 
  2. IRS Pub 970 states: “Generally, distributions are tax free if they aren't more than the beneficiary's AQEE for the year. Don't report tax-free distributions (including qualifying rollovers) on your tax return”.
  3. "IRS Publication 970, Tax Benefits for Education states: If the entire 1099-Q went to qualified expenses, room and board, tuition, etc; then, you do not need to enter the form." 

New Member
Feb 17, 2026 6:41:20 AM

I have found a way around it.  If I go to the Student Information Worksheet under "Forms", I can enter all of the qualified educational expenses and the calculations come out correctly.  I'm not sure why Intuit changed the interview format from last year, but these types of workarounds are unacceptable.