In my daughter's fourth year of college and TurboTax has awarded me $2,500. However I'm noticing something when comparing this year to last year specifically on the printed forms that say qualified tuition program computation of taxable distribution...
Last year it showed her total distributions and that number was the same as that shown in adjusted qualified higher education expenses applied. This year the amount in total distributions does not match that shown in adjusted qualified higher education applied... it's off by about $8,000. I don't really understand this I'm getting the $2,500 credit it says but it also says about 2,200 in line 7 is the taxable amount to recipient. Does that mean I have to add that amount to my daughter's return because I've never put the 1099q or t on her return before. She works part time...hardly pays any tax.
Furthermore I'm just thoroughly confused as to how this is happening.
The 1099-t shows total payments received 51k ...scholarships or grants 23k. The balance of 28k is accounted for on the 1099 Q sheet where it shows a gross distribution of 27k and I wrote a check for $1,000 this year. So I didn't overdraw the 529 plan so what does it mean when it says the taxable amount to the recipient....
