My daughter is 20 and earned 10,000+ last year. I have a 529 account for her...She is no longer my dependent, apparently.
"apparently" doesn't really count here when dealing with federal taxes. Your daughter's earnings do not matter here. If your daughter did not provide more than 50% of her own support for the entire tax year, then you the parent qualify to claim the student on your tax return, provided all the following conditions are met.
If the student:
- Was enrolled as a full time student for *any* *one* *semester* that started in the tax year and;
- Was enrolled in a course of study that will lead to a degree or credentialed certification and;
- Was enrolled in an accredited institution, and;
- did not provide more than 50% of her own support, and;
- was under the age of 24 on Dec 31 of the tax year and;
- is not filing a joint return where they are not reporting they can be claimed on someone else's return. (take note of the double negative here.)
take note in the above that the support requirement is on the student. There is no requirement what-so-ever for the parent to provide any support. Not one single penny. Additionally, scholarships, grants, 529 distributions, gifts from Aunt Mary, money from parents, etc. are all third party support and do not count for the student providing their own support.
On top of that, if the student "qualifies" as your dependent, (with only $10,000 of earned income for 2020, I'm 99.9% sure she does) then your daughter must select the option for "I can be claimed on someone else's return". Your daughter does not have a choice on this.
You the parent do have a choice. You can claim her as your dependent, or you can choose not to claim her.
The 1099Q show's me as recipient and not her.
I think @MargaretL missed your comment about you being identified as the beneficiary recipient, or I totally misunderstood your comment, "The 1099Q show's me as recipient and not her." The 1099-Q is reported on the tax return of the person's whose SSN is shown in the "beneficiary recipient" box. No exceptions. Period.
