☰
✕
Sign In

Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
Level 1
posted Feb 20, 2025 4:00:24 AM

Why is TurboTax recognizing my dependent, that is in high school as a student going to grad school.

I have two dependents on my return. One is in high school and the other is in college. I received a 1099-Q for both dependents and I received one 1098-T for the dependent that’s in college. But for some reason when I get to state taxes, which I’m filing for the state of New York, TurboTax is recognizing my dependent that is in high school as a student getting ready to go to grad school. And it’s showing that he does not qualify for the tax credit and then I just get stuck in a loop that cannot be fixed to get passed the state tax section. I have reviewed it multiple times and I never put he was in college, because he’s in high school. Only my other dependent is in college, but the section I’m stuck on is showing his name specifically as the dependent on his way to grad school, which makes no sense when he is in high school. What should I do to get this fixed?

0 6 3303
1 Best answer
Level 15
Feb 20, 2025 5:05:37 PM

Check the whole interview, in particular "who's the student".

 

You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, 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 (which you don't need).

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”.

6 Replies
Level 15
Feb 20, 2025 4:37:12 AM

One possibility: In the 1099-Q interview, on the page "what level of school did the student attend". TurboTax (TT) pre-checks college. You may need to change that. 

Level 1
Feb 20, 2025 7:11:07 AM

Okay thanks so much for the reply, I will double check that. And also does that box that is pre checked apply to customers using the download desktop software vs online?

Level 15
Feb 20, 2025 7:16:49 AM

I only have download. But, they're usually the same (but I have heard of a few exceptions). 

Level 1
Feb 20, 2025 7:21:19 AM

Okay, that’s perfect! I am using the download software anyway, so I’ll try it when I get back on my computer today. 

Level 1
Feb 20, 2025 4:14:55 PM

So I put he was in high school on that page, and it still did not work. Any other suggestions?

Level 15
Feb 20, 2025 5:05:37 PM

Check the whole interview, in particular "who's the student".

 

You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, 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 (which you don't need).

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”.