I have 529 distributions for my non-dependent children. I have entered the 1099-Qs, but where do I enter the offsetting educational expenses?

[AmyC]

If you are the one actually supposed to report the Q, then you will need to enter the nondependent education information. However, I would like for you to take a look at the rules first.

• If the 1099-Q was completely used on qualified expenses, it should not be entered.
• If the Q has taxable income, the recipient of the funds is responsible for paying. 
  • If the check was made out to you, then it goes on your return. 
  • If the check was made out to the student, then the student files the Q.

IRS Publication 970, Tax Benefits for Education states that nontaxable distributions should not be entered.

[Hal_Al]

For 529 plans, there is an “owner” and a “beneficiary”. The "recipient" of the distribution can be either the owner or the beneficiary depending on who the money was sent to. When the money goes directly from the 529 Plan to the school, the student is the "recipient". The distribution will be reported on IRS form 1099-Q. The 1099-Q gets reported on the recipient's return.* The recipient's name & SS# will be on the 1099-Q.

*Alternatively; you can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms.