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After you file
Don't report it on either one of your tax returns - it is not taxable.
If you know that the distributions from the 529 plan are not taxable because they were used on qualified expenses, do not enter the 1099-Q forms. For most qualified education program beneficiaries, the amounts reported on the 1099-Q aren’t reported on a tax return. Keep the form and associated education expenses with your tax records.
Amounts can be withdrawn to pay principal or interest on a designated beneficiary's or their sibling's student loan. The amount of distributions for loan repayments of any individual is limited to $10,000 lifetime. Interest paid with these funds doesn't qualify for the student loan interest deduction. See IRS Topic 313
Room and board usually isn't considered a qualified education expense for the purpose of education credits. The one exception is if room and board was paid for with a Coverdell ESA or 529 plan distribution. In that case, the cost can be deducted from the taxable part of the plan's distribution.
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