1099Q Box 2 & 3 are blank

Forum|Forum|4 months ago
February 24, 2026
1 reply
89 views

Today I was trying to input one of my children’s 1099Q’s. I have 4 children and have been receiving these forms for a decade. NEVER has there been amounts in box 2 and 3 for basis and earnings. NEVER has Turbo Tax required those amounts. Turbo Tax figures out your basis after you input your 1098T, 1099Q and all education expenses. You can find the calculations in IRS pub 970. This past year I spent hours on the phone with Vanguard trying to figure out the basis of a Coverdell I was rolling over. Their final answer was they don’t keep track of that amount because it’s done on your taxes. Turbo Tax needs to not require amounts in boxes 2 & 3 because I cannot proceed without an input that equals the distribution amount. All 4 of my children’s 1099Q boxes 2 and 3 are blank. Turbo Tax please correct this unnecessary input. Earlier I called Turbo Tax and requested a callback. The agent called me 50 minutes later, and at the beginning of the call, we were accidentally disconnected and the agent never called back, so I wasn’t able to resolve this issue. A software ticket needs to be submitted.

Hal_Al

Level 15

TT is working on a fix for the 1099-Q section which is expected by Feb 27. But, I have not heard if your particular issue is being addressed. I suggest you try again after 2-27-26.

Alternatively, you can just not enter the 1099-Q.

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 probably 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:

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."
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”.
"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."

j0mike1993Author

Level 2

How about if inputting the 1099Q would show you have excess distributions when taking an education credit?

Unfortunately, after inputting all my children's expenses using the Turbo Tax form option, I see 2 of my children have EXCESS DISTRIBUTIONS. You don't see the excess until you receive an education credit. Both of my children are eligible for the American Opportunity credit of $2,500. When you are receiving education credits, you can't figure out you have excess distributions without entering the 1099Q's. If 1099Q's aren't input, the excess distribution will not be taxed. When I read pub 970, it sounded like I would have to account for the excess distribution and pay the tax since there is no double dipping on expenses. If you don't enter the 1099Q, you will not see the excess distributions when taking education credits (someone really needs to fix this - several of the experts are posting you don't need to add 1099Q's based on you used the distribution for education expenses not considering you may have education credits).

Turbo Tax Deluxe desktop 2025 return won't even let me add my 3 dependent children's 1099Q's after selecting the recipient and beneficiary are dependents. I've been receiving the message Great news! You don't need to report this form {I do they are my dependents on my return}, so I've been having to update their school expenses using the forms option.

Hal_Al

Level 15

Provide the following info for more specific help (just for one student-dependent, for now):

Box 1 of the 1098-T
box 5 of the 1098-T
Any other scholarships not shown in box 5
Does box 5 include any of the 529/ESA plan payments (it should not)
Is any of the Scholarship restricted; i.e. it must be used for tuition
Box 1 of the 1099-Q
Box 2 of the 1099-Q (if not shown, you may have to calculate the earnings)
Who’s name and SS# are on the 1099-Q, parent or student (who’s the “recipient”)?
Room & board paid. If student lives off campus, what is school's R&B on campus charge. If he lives at home, the school’s R&B “allowance for cost of attendance” for student living with parents.
Other qualified expenses not included in box 1 of the 1098-T, e.g. books & computers
How much taxable income does the student have, from what sources
Are you trying to claim the tuition credit (are you eligible)?
Is the student an undergrad or grad student?
Is the student a degree candidate attending school half time or more?