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ajw24211
New Member

Why is other income including some of the interest from a qualifying 529 distribution? All of the distribution was used for qualifying expenses.

 
1 Best answer

Accepted Solutions
Hal_Al
Level 15

Why is other income including some of the interest from a qualifying 529 distribution? All of the distribution was used for qualifying expenses.

TurboTax uses parts of your dependent's college expenses to claim the Tuition credit. That reduces the amount that can be used to claim the  529 earnings, shown on the 1099-Q, as being totally tax free.

For more detail, see:

 https://ttlc.intuit.com/questions/3742999-i-entered-my-1099-q-and-my-1098-t-to-show-i-used-the-money...

 

If your income is too high to be eligible for a tuition credit, see this TurboTax FAQ for a work-around: https://ttlc.intuit.com/questions/4451709-why-is-the-529-distribution-from-my-1099-q-showing-up-as-t...


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2 Replies
Hal_Al
Level 15

Why is other income including some of the interest from a qualifying 529 distribution? All of the distribution was used for qualifying expenses.

TurboTax uses parts of your dependent's college expenses to claim the Tuition credit. That reduces the amount that can be used to claim the  529 earnings, shown on the 1099-Q, as being totally tax free.

For more detail, see:

 https://ttlc.intuit.com/questions/3742999-i-entered-my-1099-q-and-my-1098-t-to-show-i-used-the-money...

 

If your income is too high to be eligible for a tuition credit, see this TurboTax FAQ for a work-around: https://ttlc.intuit.com/questions/4451709-why-is-the-529-distribution-from-my-1099-q-showing-up-as-t...


ajw24211
New Member

Why is other income including some of the interest from a qualifying 529 distribution? All of the distribution was used for qualifying expenses.

Thanks zeroing our the amount fixed the problem!
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