These accounts are funded by after-tax dollars, (although some states offer credits) it is the earnings that you get to use tax-free. HOWEVER, the funds must be used for education expenses, or it's taxed and you could incur a penalty.
The IRS gets a copy of the 1099-Q. When you enter the 1099-Q, you must also enter the education expenses to match to it. Those expenses are usually entered from a 1098-T.
1099-Q info
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
