We got a refund for room/board in 03/2020 that was paid with the 529 distribution in 2019. We don't have 529 distribution in 2020. How do I report this refund?

My daughter graduated in May 2020, so there is no other qualified expenses cover the refund. By the time I realized the tax issue, it was too late to recontribute back. I know the earning is taxable and there is a 10% penalty. Moreover, I know which lines to enter on 1040 for the earning and penality. But how can I do it in TurboTax?

359

Level 15

Mar 8, 2021 5:21:58 PM

I suggest you enter it as a 2020 distribution.

Returning Member

Mar 8, 2021 5:30:17 PM

Thanks.

Do I need a 1099-Q form to do that? I don't have one for 2020. Does it mean that I need to create a "fake" 1099-Q entry with the refund? I suppose this will force TurboTax to include both the earning and penality. Will do that if there is no better solution.

Level 15

Mar 8, 2021 5:33:15 PM

Yes, a fake 1099-Q is the only way to do it. But the "fake" is not sent to the IRS. It is only an entry mechanism.

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We got a refund for room/board in 03/2020 that was paid with the 529 distribution in 2019. We don't have 529 distribution in 2020. How do I report this refund?