I have submitted a 1099-Q (529 dist) for my son's tuition, but the earnings are being counted as income for both federal and state returns. How can I fix this?

[rsmohammed]

I have included all information accurately on the form, and the distribution was used only for college fees (tuition, room and board). But I still see the earnings in Box 2 show as taxable income in both returns.

[SharonD007]

Form 1099-Q only needs to be reported on the tax return of the person whose SSN is on the form if the withdrawal is more than the tuition paid in Box 1 of the 1098-T plus other adjusted qualified educational expenses. If the withdrawal is more, the earnings on the excess distribution would be taxable income.

Based on your question, you don't have to report the 1099-Q on your return since the withdrawal exceeds the education expenses, so you can delete it.

To find out what are qualified educational expenses, please review the Guide to Tax Form 1098-T: Tuition Statement. Please review the TurboTax articles Guide to IRS Form 1099-Q: Payments from Qualified Education Programs and What is IRS Form 1099-Q? for further details.