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Returning Member
posted Feb 5, 2024 8:59:11 AM

Daughter's 2024 1099-Q after she graduates Spring 2024and expenses claimed when?

Greetings all,

Daughter in final semester of college this spring. Tuition, Room and Board expenses have been reimbursed from her 529 plan for before end of 2023 and her 1009-Q reflects that. My problem is what to do about Room and Board expenses incurred and reimbursed in 2024.  She will receive a new 1099-Q for 529 disbursements for 2024. Do I have to wait to claim all room and board expenses incurred in 2024 on our 2024 tax returns? Hope this question makes sense to somebody besides me. Jon

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2 Replies
Level 15
Feb 5, 2024 9:04:34 AM

Disbursements in 2024 are dealt with on the 2024 return. 

Level 15
Feb 5, 2024 9:44:27 AM

Q. Do I have to wait to claim all room and board expenses incurred in 2024 on our 2024 tax returns?

A. Yes.

 

In actuality, you don't need to claim anything (most likely) in either 2023 or 2024. 

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 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! 

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." 
  1. 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”.