Please enter the information from the 1099-Q first, and then
enter the corresponding education expenses next. This should allow the program
to apply the distribution to the expense.
The 1099-Q was sent to you if you are the account holder and the funds were not made directly to the beneficiary or the school.
If the funds did go directly to the educational institution, you will need to contact the issuer and have the 1099-Q corrected.
If the funds went through you, and paid for education expenses, you do not have to claim those funds as income, BUT you and the student cannot use the same expenses towards other tax-free assistance or towards applying for an Education Credit.
If the distribution doesn’t exceed the amount of the student's qualifying expenses, then you don't have to report any of the distribution as income on your tax return. If the distribution exceeds these expenses, then you must report the earnings on the excess as "other income" on your tax return. When you pay a student’s school expenses with these funds, you cannot claim a tuition deduction or either of the educational tax credits for the same expense.
(edited 2-27-17)
CLICK
HERE for a guide to the 1099-Q
CLICK
HERE for more information on the 1099-Q
