Please clarify-
Are you reporting a 1099-Q? If so, was the 1099-Q issued to you?
Yes, the info is from a 1099-Q. It was issued to me, the student.
Are you the student?
Yes, I am trying to calculate my own taxes.
Were the funds used for education expense?
The funds were used for QTP QEE - tuition, mandatory fees, required books, and qualifying room and board.
Did the student receive a scholarship?
Yes. The tax-free portion is $7,450.
Are you getting an education credit?
My mom claimed me as a dependent and plans to claim the AOC for $2,500.
QEE for QTP = $15,116
Expenses used for AOC = $4,000
Tax Free Scholarships and Grants = $7,450
QTP distributions = $5,750
Adjusted QEE = $15,116 - $4,000 - $7,450 = $3,666
Earnings on QTP Distributions (Box 2 of 1099-Q) = $703
$703 - ($703*($3,666/$5,750)) = $254.79 taxable income per QTP Earnings
TT's worksheet includes a line I don't see in Publication 970. It is 2h - Adjusted Qualified Higher Education Expenses Applied. I think because of this line, TT is calculating the total QEE attributable to this QTP distribution as the full $5,750 rather than $3,666. I don't understand why.
This calculation enables TT to exclude amounts as taxable income on Schedule 1. But I feel I should have taxable income from this QTP distro earnings.
