Why doesn't turbotax allow me to enter qualified education expenses like room & board? is their a problem with the software?

[Slobo1]

It allows books and supplies to be entered if charged by the institution, and indicates other expenses can be entered later, but it never then prompts for other expenses before moving out of the 1098-T and 1099-Q sections in the online version.

[Hal_Al]

Apparently, TT is broken (the 2025 education section appears totally redesigned). . They've been notified. We're waiting on a update. 

[nhttip]

Thank you, I got the email that form 1099-Q was ready, I went in and couldn't find anywhere to enter room & board to offset the withdraws on the account, hope it is fixed soon

[Caesarb]

Thank you! I thought I was losing my mind! I wasted so much time clicking around trying to figure out what the problem was!

[Demaspra]

Thanks for posting. Not impressed with TT on this.  Wasted time and sanity. 

[jmsalt1]

There is another thread on this issue I've been posting on in the Taxes > Retirement section.  I wasn't the OP on the thread so I don't know why it was started there.  Can someone move that thread to the Taxes > Education section?  I'll try to link below:

Re: How to enter Room & Board expenses in 1098-T / 1099-Q sections

[Hal_Al]

The 1099-Q is  only an informational document. The numbers on it are not required to be entered onto your (or your student's) tax return. The interview is complicated and it's easy to make mistakes. Avoid it if you can and you can. 

You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records (you don’t need it). You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. You also cannot count expenses that were paid by tax free scholarships.

References:

1. On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution." 
2. IRS Pub 970 states: “Generally, distributions are tax free if they aren't more than the beneficiary's AQEE for the year. Don't report tax-free distributions (including qualifying rollovers) on your tax return”.
3. "IRS Publication 970, Tax Benefits for Education states: If the entire 1099-Q went to qualified expenses, room and board, tuition, etc; then, you do not need to enter the form." 

[jmsalt1]

Hi Hal_Al,

As outlined in my post on the other thread that I linked, this solution posed by yourself and others in the past (just don't report / include your 1099-Q and / or 1098-T information) doesn't resolve certain scenarios and is just a bad resolution.  I hope TurboTax isn't falling back on that as their official stance on it and is sticking to your earlier post which indicates they are aware of the problem and are looking to address it, hopefully quickly.  This is crazy, the ability to enter Room & Board not covered / included on a 1098-T as qualified education expense has been there in TurboTax in the past, and all the way up to last year.  It makes me less confident in the product when this type of stuff happens.  

[Hal_Al]

Yes, they're going to fix it.  Not entering the 1099-Q is NOT  TT's official position.  

It is a common recommendation, in this forum since so many people have problems entering it and getting the right result. 

[jmsalt1]

Hi Hal_Al

Thanks for clarifying.  Will you post an update here when you know the patch / update is available when logging into TurboTax and it asks if you want to update?

With the past functionality, I've never had an issue getting to the right result in the end.  While it's definitely been cumbersome to navigate, I've always managed to get there.

For others benefit, I always save my TT file and then write down the amount TT is showing as my fed & state Refund / Amount Due prior to entering my 1099-Q & 1098-T information as well as my non-1098-T qualified education expenses that I summarize throughout the year.  If I know that all of my beneficiaries' expenses are captured in a 1098-T & otherwise are qualified education expenses, I continue to work thru things in TT and determine any oversights on my end until the fed & state Refund / Amount Due equal what they were before I started.  If they don't I back track through things in an effort to find a missed click, hidden prompt or whatever is the causation.  I've always been able to get there going back to 2019 and having 3 kids that have been in or are currently in college. 

Thanks.

[SnoopyTT]

I am so annoyed.  Like you, I spent an hour going over the steps again and again, thinking that I must have missed a check mark or something.  Thanks for giving my sanity back by confirming that there is in fact an issue with TurboTax on adding the Room and Board.

[jmsalt1]

Hey SnoopyTT - 

You have every right to be annoyed with this oversight for TT 2025.  This is not some obscure functionality that is missing (such as a lack of support for Form 8621....don't get me started on that).  If you added up all the wasted hours that people are spending trying to get to the bottom of this before even getting to this forum in search of answers it definitely starts to add up because this is a common situation for anyone who established 529 Plan accounts for their kids and is in the years where they are making withdrawals to cover the college expenses they are incurring (in particular here - Room & Board that is not captured by a university 1098-T).  It's a surprising oversight to be honest.  Whomever was responsible for the retooling of this part of the TT program for 2025 was not up to the task and it appears no one took the time to check their work prior to releasing the software for 2025.   

[mmatrull]

Its bad every year but this year takes a cake.  I didn't think they could make it any worse than usual...but they surprised me!  For once I decided to start my taxes early instead of waiting until late March.  Silly for me to think Intuit wouldn't wait on its users to find all the software bugs instead of doing their own System Test and UAT.  Cant wait until next year when I'll likely be able to find a Chat Agent that will do my taxes in about 5 minutes.

[jmsalt1]

lol on the chat bot!  

[anonymouse1]

Ugh, I hadn't even looked at that section because we haven't gotten a 1098-T yet - and just to make it harder, our senior is off campus this year.  For now I just entered the 1099-Q and it's showing the interest is taxable but if TT can't get this straightened out so we can enter her fall rent, utilities and groceries (she entered receipts into a spreadsheet each month and sent it to me so we could pull from the 529), I'll just delete the 1099-Q from TT!