Can I report a 1099Q from a 529 plan and college expenses on my return even though my daughter is no longer my dependent?

[Hal_Al · Accepted solution]

Yes, if the 1099-Q is in your name and SS#.  But, you can only report the college expenses for purposes of the 529 plan earnings exclusion. You may not claim a tuition credit.

Alternatively; you can just not report the 1099-Q, at all, if the 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, in case of an IRS inquiry.

[Hal_Al]

If the student (or the person claiming her as a dependent) is claiming a tuition credit; you have to coordinate with her.  You cannot use the same expenses, on your return, that she uses to claim the credit on her return.

[ScruffyCurmudgeon]

If the qualified education expenses were at least the amount of the distribution, and were for the benefit of the named beneficiary, there is no requirement to report the 1099-Q.  If you do choose to report the 1099-Q, and if there expenses, as stated, were at least the distribution and for the beneficiary, there is no tax liability.

See attached PDF for reporting process