Help! Please! Using TT for 2021. Accidentally took out a little bit too much from the 529 because of scholarships. So, there is no penalty on the 529 disbursement because there is a scholarship exemption, but we do have to pay taxes on the 529 interest. Ok, but moving ahead to the Hawaii State form, the box is automatically checked for "report child's interest on parent's return" and I can't uncheck that box. Except that box shouldn't be checked. The interest is not the STUDENT'S to report. The interest is for the PARENTS to report because the parents are the account holders and the parents received the disbursement from the 529. I don't know what to do. I can't uncheck that box on the Hawaii form. Also it seems that if a Hawaii N-814 is filed, the State is going to expect to see a 1040 from the child. But the child has absolutely no income and no interest income. There is no reason for the child to file a 1040. Help, please!
To clarify, who was issued the 1099-Q?
When there is taxable income from a 529 Distribution, it is claimed by the person listed on the 1099-Q as "issued to", be that the Student (beneficiary) or Parent (owner).
Parent
1099-Q was issued to parent. Check was made out to parent. Parent is account owner.
Thanks for trying to help answer my question.
Parent
1099-Q was issued to parent. Check was made out to parent. Parent is account owner.
Thanks for trying to answer my question.
But wait, it gets even better. The N-814 says to use it if the child is age 14 or less. Nope! I'm paying for college. The kid is not age 14 or less.
So, the box to "report dependent student's income on parent's return" is automatically checked and I can't uncheck it, but I went ahead and checked "none of these apply" right below it. On the next screen I got asked, "Do you want to report dependent child's income on parent's return?" I answered "no: because there is no child/student/dependent income and TT allowed me to complete my return without asking for an N-814 again.