How to report 529 plan use for second child

[Twingrove2]

I have two children in college.  We spent down the oldest's 529 plan last year and are using her brother's 529 plan to pay both their tuitions this year.  How do I indicate this on Turbo Tax?  It will only allow me to indicate one child or the other when I answer who the 529 plan funds are being used for when reporting the 1099-Q.

Thanks,

Twingrove2

[SusanY1 · Accepted solution]

If you only used the funds for qualifying education expenses, you are not required to enter the information into TurboTax at all. If this is the case for you, it may be easier to delete the entries. 

The IRS only requires that you enter Form 1099-Q when you have a taxable distribution to report.  

See Instructions to Recipient on the back of Form 1099-Q: "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."

[NCperson]

@SusanY1 - the issue with the advice provided is that it circumvents the value of TT's product. 

While I appreciate the IRS states that you don't have to post the 1099-Q if you used it on qualified expenses, how is a TT customer to know what a qualified expense is?  THAT is what customers are paying TT to tell them!!

the way I look at it, TT went through a lot of pain and effort to build controls into its software to remove the risk that the customer does something wrong, which is more possible if the decision to eliminate the 1099Q from the return is left with the customer. 

So why suggest to the customer to figure it out themselves?