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Level 2
posted Jan 25, 2022 12:30:41 PM

TT - How to enter ESA withdrawals to pay tuition at a NON-QUALIFIED overseas college

Using the interview in TT Deluxe, how do I enter an Education Savings Account (Coverdell) withdrawal for a dependent to pay a non-qualified expense (tuition at a foreign college)? Where is the penalty shown?

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1 Replies
Level 15
Jan 25, 2022 12:49:51 PM

In TurboTax (TT), enter at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

“I’ll choose what I want to work on” button

-Scroll down to:

--Education

  --ESA and 529 Qualified Tuition Programs (1099-Q)

 

When you fail to enter any offsetting expenses, TurboTax will treat all the earnings (box 2 of the 1099-Q) as taxable and calculate the 10% penalty on form 5329.