1099-q

[donphelan]

Thank you for your prompt reply and hoping you can provide additional insight. 26-year-old graduate student daughter who lives at home. She has $35,000 in W-2 income which, unfortunately, had very little Federal withholding.  She received in 1098-T with $18,000 in box one and $10,000 in box two. Her only other college expenses would be for books and materials, etc.  I received, as the recipient for which she is the beneficiary, a 1099-q with $14,600 in box one, $8600 in box two, and $6,000 in box 3.  What might be working against me is that I took these proceeds late in 2024 to pay for the 2025 semester. Please advise on how to best handle the 1098-T and 1099-q

[Hal_Al]

Duplicate post

https://ttlc.intuit.com/community/college-education/discussion/re-1099-q/01/3606150#M60865

@donphelan  I recently added  "how to" instructions at your other post. 

[ThomasM125]

You must enter the Form 1099-Q on your tax return since you are the recipient. It appears that the proceeds were used to pay for qualifying education expenses, in spite of the fact that the form 1098-T may not reflect that because of timing differences between years. If so, when you are asked to enter the amount of the proceeds used to pay for education expenses, you can enter the full distribution amount and you will owe no tax on it.

Your daughter would enter the Form 1098-T on her tax return since she is no longer your dependent. I think you mean there was $18,000 in box one and $10,000 on box 5 on the 1098-T form. If so, you daughter may be entitled to a lifetime learning education credit on up to $2,000 since her education expenses would be more than her scholarship income.

[donphelan]

Thanks again for all your belp