Funds from 529

[jmead1]

I daughter was sent to a private school and was there for 3 months in 2023.  I used her funds from her 529 in 2022 as well but that was for almost the whole year.  She was in middle school and TT only give you the option of elementary or high school, which do I use?  I received a 1099 -Q and was trying to enter on my taxes but then it said I couldn't and then when I entered on hers hit say she owes money.  The distribution was for 13860 and  and her tuition, room & board, food, books and everything were included in that and were the same amount .  I read another post saying not to worry about filing because all the expenses and such are really for college.  The post said just don't file and keep your receipt if the IRS ever asks about the 1099-Q.  Thoughts?

[DaveF1006]

To clarify, when you reported this on your daughter's return, who did you list as the recipient and the beneficiary?

[jmead1]

My daughter since the 1099Q was in her name and ss#.  

[DawnC]

You can keep the form with your tax records if the distribution was less than her qualified expenses.  If the distribution doesn’t exceed the amount of the student's qualifying expenses, then you don't have to report any of the distribution as income on your tax return. If the distribution exceeds these expenses, then you must report the earnings on the excess as "other income" on your tax return. When you pay a student’s school expenses with these funds, you cannot claim a tuition deduction or either of the educational tax credits for the same expense.  See 1099-Q Guide

[Hal_Al · Accepted solution]

Q. She was in middle school and TT only give you the option of elementary or high school, which do I use? 

A. Either will work. It's all "K-12".

Q.   I received a 1099 -Q and was trying to enter on my taxes but then it said I couldn't and then when I entered on hers hit say she owes money.  The distribution was for 13860 and  and her tuition,were included in that and were the same amount .

A. Yes, some of that is taxable. You have two problems; 1. there is a $10,000 limit to how much you can withdraw and still be "qualified". 2. Only tuition is a qualified expense. You can not pay K-12  room & board, food, books and everything else. 

The 1099-Q must go on the child's tax return, since she is the recipient (the 1099Q was in her name and ss#).