529 withdrawal in 2019 used for 2020 qualified educational expenses

[bryanjands]

Because 529 withdrawals take time to process, I initiated a withdrawal in late 2019 (December) to pay for Spring 2020 tuition for my dependent that was due in early January 2020. The 1099-Q I received for the withdrawal identifies the tax year as 2019. Is there a way for TurboTax to capture that this was money used for the following tax year? 

[DavidD66]

No, unfortunately if you took the withdrawal in 2019, and didn't pay qualified education expenses with it in 2019, you will have to include the income portion of your withdrawal on your tax return.

[Hal_Al]

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. It will prepare a 1099-Q worksheet for your records, in case of an IRS inquiry.

If you made the payment, in December, even though it was for 2020, it counts for the 2019 1099-Q.  Otherwise, as  DavidD66 already said, you actually have a non qualified withdrawal.  Distributions must match the year qualified expenses were paid.

[RUBYRU71]

@DavidD66 I did the same thing.  So, if I understand correctly, I have to pay taxes on the withdrawal for 2019.  Will I be benefited in anyway when I file my 2020 return?

[alexxjorgensen]

I did the same thing, requested funds on 12/31/19 to pay in January 2020.  Its. now being taxed and costing me $1k.  Is the 1099-Q required to report on tax return?

[Hal_Al]

Q.   Is the 1099-Q required to report on tax return?

A. No. 

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." 

 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.