Something else I just noticed. So I filled out my son's form, which made sense. However there is a form for Tax for Certain Children Who have Unearned Income. It asks if you have a child with unearned income more than $2200 in the age range of 19-23 and their earned income did not exceed one-half of their support. Since my son claimed the 529 non qualified withdrawal it counted as unearned income. And then it asks for the parents total taxable income. Apparently it is using that number to decide on the tax rate. So instead of the 529 non qualified distribution being taxed at my son's rate, it is being taxed at our rate. Something about the "kiddie" tax. By doing that we now owe a lot more. Does that sound right? I'm getting so confused.
Thanks
