Any State or its agency or instrumentality that establishes and maintains a qualified ABLE program must file Form 1099-QA with the IRS for each ABLE account from which any distribution was made or which was terminated.
The information about a distribution reported on Form 1099-QA needs to be reported on a tax return only if any part of the distribution was used for a purpose other than the support of a disabled individual. Any amounts distributed in excess of qualified disability expenses must be included in the individual's taxable income and will be subject to a 10% penalty.
Any excess amount would be entered as follows in TurboTax Online:
- Click "Other Tax Situations"
- Scroll down to "Additional Tax Payments" and click Show more
- Scroll down to Additional taxes and repayments and click Start
- At the screen, Any Other Taxes? note that it includes excess ABLE account contributions or distributions. Select Yes and continue with the interview.
See here for information from the IRS regarding this form.
See here for another discussion on this topic.
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