I've waited for calls from a TT specialist for over 3 hours total - each time I encountered an issue with the call. Any help would be appreciated.
I finished college in 2019 and received my 1099-Q and 1098-T.
The Box 1 (total gross distribution) on my 1099-Q is a few hundred less than Box 1 (Payments Received for qualified tuition and related expenses) of my 1098-T.
However, when I subtract Box 5 (scholarships) from my Box 1 (Payments Received for qualified tuition and related expenses) on the 1098-T, the total gross distribution on my 1099-Q ends up exceeding the remaining amount by a few hundred. Therefore, to my understanding, I owe taxes on this excess.
This brings me to my current confusion. Do I still qualify for AOTC? TT and an IRS survey says yes, but I've read articles on TT that say if I use a 529 to pay for expenses, I am ineligible. Another question is how do I actually file this excess amount? TT articles say to mark it as "Other Income", but where is this "Other Income" field? I didn't receive a 1099-MISC or anything.
Do I just report the excess amount on the 1099-Q subsection? This doesn't make sense as TT asks for the box values. Given the amount I owe after filling that subsection using the box values - not the excess - I'm worried that the system thinks I used all of funds on Box 1 in the 1099-Q on ineligible education expenses.
Yes, you owe taxes on the excess.
Yes, you can qualify for the AOTC, but only by paying more tax on the 529 plan (to free up expenses for the AOTC). This also assumes you were an undergrad and you (or your parents, if you were their dependent) did not claim the AOTC 4 times already (graduation year is usually the 5th tax year).
Provide the following info for more specific help: