Is 529 distribution in Jan 2022 for reimbursement of out of pocket payment of Spring semester 2022 paid in Dec 2021 taxable if in different years?

kimhnance · ‎March 19, 2023

When I enter my 1099-Q and 1098-T in TurboTax since the amounts the college is showing I paid is less than my distribution it is being taxed. It was used for tuition which is a qualifying expense.

DavidD66 · ‎March 19, 2023

Distributions from 529 plans must be used to pay qualified expenses in the same calendar as the distribution. If you took a distribution in 2022, it can only be used for payments made in 2022. Payments made in 2021 don't qualify, even if the academic period was 2022. If you had qualified education expenses paid in 2022 that you can "match" that distribution with, it will be a qualified distribution. Otherwise, it's not a qualified distribution.

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