1099-Q

Forum|Forum|4 years ago
February 28, 2022
1 reply
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I received a 1099-Q for college expenses. Am I supposed to enter in both the 529(A) and 529(C) figures in TurboTax?

Cynthiad66

Level 14

@MarkWiz72 - No. Enter the form 1099-Q based on the plan you have Determine where to enter by reviewing your 529 plan.

What is the difference between 529 and 529A?

What is a 529A plan? Similar to a 529 college savings plan, a 529A plan allows you to save for a specific purpose. Instead of strictly using the money for education-related expenses — as would be required with a 529 college savings plan — you can use the money for disability-related expenses

What is a 529 C?

A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code

Form 1099-Q reports distributions and benefits from Coverdell education savings accounts and 529 plans. It's reported on the tax return of the person whose Social Security number is on the form.

Here's how to enter your 1099-Q in TurboTax:

Use this link for more information: Information on 529 plan

Open or continue your return.
Select Federal and then Deductions & Credits.
Scroll down to the Education section under All tax breaks.
Select, Show more and select Start or Revisit next to ESA and 529 qualified tuition programs (Form 1099-Q).
Follow the screens to enter your info.

Use this link for additional information: Qualified Tuition Plans - IRS

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MarkWiz72Author

Level 3

ok thank you. I noticed my return plummeted after entering my 1099-Q. am I being taxed that much on my distribution even though it was used for a qualified education expense?

ThomasM125

Level 15

QMarkWiz72 You shouldn't be taxed if you used your education plan distributions to pay for qualifying education expenses, which include room and board necessary for you to attend school.

If your qualifying education expense are more that your distribution, then you don't need to report the form 1099-Q on your tax return. However, you need to keep in mind that the education expenses you use to exempt your distribution from taxation cannot also be used for you or anyone else to qualify for an education credit.

To have TurboTax calculate your allowed deductions, you would need to enter your form 1098-T in the Education section, in Deductions and Credits, an then Expenses and Scholarships (Form 1098-T). However, if you are a dependent of someone and they received an education credit for you, you would have to exclude expenses they used to qualify for the credit. Please keep in mind that room and board are not allowed for the education credit, so you can use all of those expenses to exempt your education plan distributions.

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