We received a 1099Q for a 529 distribution that was rolled over to a Roth IRA. The recipient meets all the requirements for a rollover to a Roth. The earnings portion of the distribution are being assessed federal income tax when the 1099 Q information is entered. I read an earlier question and answer which indicated that the 1099 Q should not be entered as it is not subject to federal tax and that TurboTax will consider it taxable income if entered.
My issue is that the 529 is an Ohio plan and PA, the state where we now live, taxes 529 to Roth conversions when the 529 plan is not a PA plan. If I do not enter the 1099Q then how will TurboTax figure the correct our PA tax correctly?
What should I do with the 1099Q in this case, not subject to federal tax but subject to state tax?
