SusanY1
Expert Alumni

Deductions & credits

Form 1099Q only needs to be entered if you have a taxable distribution to report.  

 

Form 1098T only needs to be entered if you either have a taxable scholarship to report (which would go on her return) or if you are claiming a tax credit.   You cannot "double-dip" and claim the credit for tuition paid for by the 529 plan funds.  However, if you had more expenses than the distributions covered, you can take a credit for those. 

 

You see the big jump in your refund when you enter the 1098 T because you are seeing the full value of the AOTC credit as if you had no "help" from the 529 plan to cover expenses.  Then you see a drop when you enter the 1099Q as it adjusts for the combination of the two.  The Pennsylvania number is likely not yet accurate as you haven't started working on that part of the return yet.  

 

If you had out-of-pocket expenses, not covered by your 529 plan withdrawal, that are equal to or greater than the net amount listed on your daughter's Form 1098T (the difference between Box 5 and Box 1), then you should leave the Form 1098 T in TurboTax, and delete the Form 1099Q.  If all of her expenses were covered by the withdrawal, remove them both. 

 

Apply the same logic when determining if you should amend the prior year returns.  

 

 

 

 

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"