My daughter received a couple refund checks from her university in 2022 and I failed to chase it soon enough to figure out that we should have just returned the funds to the 529 within the allowed time to avoid penalty/tax. Dumb, I know, but that's water under the bridge at this point. Given that . . . how/where do I enter the refund amount in TTax so the appropriate tax and penalty can be calculated in?
I went through the interview process, entered the 1099Qs and the 1098T. There was a place where TTax asked if our student received a refund (I said yes) and then asked if the refund was returned to the 529 within 60 days (I said NO) . . . but I never got asked how much it was. Was kind of expecting that to be the next obvious question in the interview.
So, I'm trying to understand how I handle this in TTax. I would think I need to enter this refund amount manually somewhere--since I don't think TTax could know based on the 1099Q & 1098T info. Any adivce here would be appreciated.
TurboTax automatically does the calculations once the 1099Q and the 1098T are entered. The result of the excess is reported on Schedule 1 Form 1040, line 8 or Form 1040NR, line 21. If the distribution is subject to the 10% penalty tax, the additional tax is reported on Schedule 2 (Form 1040), line 6, or Form 1040NR, line 57.