I cannot continue my Federal Taxes (QTP)

[MarilynG1]

The IRS has not finalized the 1099-Q form for Efiling, so you would not be able to Efile it anywhere yet.

For most qualified education program beneficiaries, the amounts reported on the 1099-Q aren’t reported on a tax return.

However, if annual distributions exceed your adjusted qualified education expenses, you may need to report some of the earnings reported in box 2 as income on your tax return and pay an additional 10 percent tax on it as well.

[KathrynG3]

Yes, @Stahlwittchen, you could delete them from your e-file taxes. Please see @MarilynG1's post as confirmation. It would be a best practice for you to keep your documentation to verify your funds were withdrawn in compliance with the Section 529 plan.

[jdufrenne99]

What did I do wrong

[SusanY1]

If you will flip your 1099-Q over, you will see the IRS instructions that you do not need to include it on your tax return, unless you have a taxable distribution.   If you are just using it to pay for your qualifying expenses, don't enter it into TurboTax.  

There is no IRS requirement to report the distribution unless it's taxable. 

[aspruce]

What if it is taxable? My husband withdrew the 529 and used the money for non-qualified expenses. Should we file an amendment later and just delete the form from our taxes now?

[MinhT1]

As your husband used the 529 distribution for non-qualified expenses, the earnings part of the distribution is taxable and subject to the 10% penalty and you have to report it on your tax return and pay the tax due. If you do not report it now, when you file an amendment to report it, you'll have to pay interest on the tax due on the form 1099-Q, not counting the hassle of filing an amended return.

[Stahlwittchen]

@KathrynG3 @SusanY1  

Thanks for all the input. One last question though, so for my state's 529 program, the qualified tuition expenses limit is $10,000. And I used less then that last year (this included tuition for the fall and current semester, as well as other stuff for school). 

Does this mean I don't have to report it? Or am I missing something?
Thanks. 

[dabasa53]

Marilyn G1, 

In my case the distribution is taxable, but the program is capturing it correctly! It is calculating the taxable portion of the gain and reporting it on form 5329, and carrying it forward to Schedule 1- “Additional Income and Adjustments to Income”. It is also picking up the 10% additional penalty on Schedule 2- “Additional Taxes” and adding that to tax due on line 15 of form 1040. So all is correct but for some reason the program will not allow me to e-file the return. Why?

[sed0701]

I am in the same situation and am incredibly frustrated.

[thedude16]

I also canceled my son's 529 and didnt use the funds for education purposes.

I'm also stuck but sounds like its best to wait till after 1/31?

[SusanY1]

I don't believe you are missing anything.  It doesn't appear that you need to include the data from your 1099Q. 

 It does sort of go against our nature, most of us, not to type in the data from this official-looking form! 

This isn't a form that is going to generate a letter in the fall asking why it wasn't on a tax return - the IRS wouldn't have any idea who to send that letter to! They are trusting us to self-report taxable distributions.  There are so many moving parts on these that it is impossible for the IRS to properly track them the way that the can a W-2 or many of the other forms of 1099s. Anyone can be the owner, anyone can be the beneficiary, there are so many different expenses that qualify, etc.

@Stahlwittchen

[Stahlwittchen]

I've done some experimentation (meaning I have taken off and on my 1099Q form), and I have noticed that a small fraction of my QTP distributions are indeed taxable. Being the paranoid person that I am about not wanting to get in trouble with the IRS, I suppose I have to go through the daunting task of waiting until the IRS clears this form for submission on TurboTax. 

It's just not fair! I have a vacation in the middle of March for Spring Break (flight & hotel paid for already), and seeing as how tax returns are being slightly more delayed this year, I just hope that I can get my return by then so I have some extra money!

I will be checking my account daily, and if I see a clear for the QTP/1099Q form, I will post a message on this thread. I wish everyone luck.

[melron963]

You could always delete the 1099-Q form from your return so you can transmit your return without the error.  This will at least get things going so your refund is not delayed.  Periodically check for updates in TurboTax to see if the error is fixed.  When it is then file an amended return.  

[splitfinger09]

I am getting the same error as well. Please help!! My earnings were not used for a qualified expense so I definitely need to report them on my taxes. 

[LindaB1993]

The 1099-Q should be entered at Deductions and credits/ education, not in the income section.

The SECURE act, signed 12-20-19 allows 529 plan money to be used for student loan payments. 

Even though you may not be affected, this area in the TurboTax program has not been updated. Once IRS finalizes and send the approval, you will be able to electronically transmit your returns