I saw all your posts regarding your confusion with the 1099 Q’s and 529 stuff and the lifetime learning credit. Hopefully you figure that out by now. But generally, the lifetime learning credit can only come from monies that were not from QTP529 accounts, unless you allocate some of the money from the 529 account as taxable then you can use that toward the lifetime learning credit. I know it seems backwards to tax it in order to get a credit and then you end up being better in the end, but that’s how these things work sometimes. This is why our taxes are so unnecessarily complicated to deal with.
I did just want to chime in that somebody in the thread recommended that you do not have to enter the 1099Q information if all of it was used for qualified expenses. I just wanted to warn you that if you don’t enter it, you may eventually get a letter from the IRS asking for information about your tax return. The Pennsylvania 529 people send notifications to the IRS separately from you that there was a distribution from the account. If you don’t report it on your taxes and show that you had qualified education expenses to match that 1099Q, somebody’s going to flag it at some point and ask you for more information. I got flagged this year for both 2023 and 2022 and had to put together submittals for both years, proving that I had these expenses because something in the forms did not get entered right to show that I had qualified education expenses. It was a big headache to deal with and figure it out, and I’m still waiting for a response from the IRS for both years. Of course, that deep dive I had to do into figuring that out actually helped me to do my taxes for 2024, so I don’t run into that in the future for this tax year.
