I cannot continue my Federal Taxes (QTP)

[5campers]

The tax change allows for up to $10, 000 to be paid from 529 towards total student loan payments, not just interest.  So if you took a $3,000 529 distribution and paid $3,000 towards student loans, you can do so penalty and tax free. 

[mitsu763]

From what I can tell, TurboTax is telling me the gains of my son’s 529 are taxable even though the funds were used for tuition and books.  Is there maybe a workaround for this?

[chrisman63]

Hello, I am having the same EXACT problem. I just got off the phone with a Turbotax professional and he said I have a choice to make. I can wait and be patient or I can flie w/0 claiming it. BUT he said he can't tell me what to do.  The REALLY messed up part about this, is in my case, we are talking about $108 in earnings. 

[chrisman63]

That is because the IRS and Congress, are a bunch of IDIOTS.

[ejj44]

That’s my deal. We paid less than 2 grand out of the 529 to pay directly to the school towards tuition. TT says the taxable amount was like $140.   

[chrisman63]

@ Susan (Turbotax Employee) I am REALLY glad that I read your advice (comment) because I was going to change the 1099Q and make it a 1099INT. The amount of earnings holding me up, is $108 and I figured if I claimed it in some way, the IRS couldn't say that I didn't.  But after reading your advice, I read the form and it most certainly does indeed say to not include it if the distribution was for qualified expenses. My distribution, was to pay for my son's tuition. Thank you for your help.

[piper3454]

Will not allow me to update the TurboTax program when I start. error message 42016.

[samirineou]

So in layman’s terms what does that mean exactly? I used a 529 plan to cover my tuition and then a fafsa grant to cover the taxes. Do I need to file my 1099q or can I leave it off? I paid $40 for the deluxe package because that was what was needed to complete my return however, TurboTax has already taken the money from my account without allowing me to file.

[Gallucci71]

I paid up front too and they aren’t wanting to give a refund and went I filed through h and the block with no issue.   

[CatinaT1]

@samirineou, Yes, you will need to enter your 1099Q and any 1098T's you receive.  When entering your 1099Q, you are also entering your qualified educational expenses.  If you did not use the distribution for qualified expenses, you are taxed on the amount and pay a 10% penalty.

[Grcornwell99]

Hi Susan,

I don't have any taxes due and I used my QTP only for tuition/school expenses like books. Does this mean I don't need to report it on my taxes? I'm also being stopped and gettings the 'law recently passed by Congress' message. 

Thanks!

[Gallucci71]

Thank you for the response. I did that and it has a hard stop and won’t let me file. It’s beyond frustrating. You have a glitch on your programming and it needs to be fixed because there are several people being affected and you’re taking our money and not allowing us to file. 

[LindaB1993]

The Tax Reform Act has delayed final approval by IRS of the Form 1099-Q.  Updates however, are made daily.  Please check again after 02/03/20.

[candie1971]

Wow! I really think they are trying to get us to pay for the live chat. 

[candie1971]

@clancy1121 thank you, I think I will do the same. I will have to type everything in again, but it beats waiting around on TT