Questions re: non qualified distribution from 529 due to scholarship
- Is this correct? Distributions from a 529 education plan above actual ed expenses but for the amount of the student's scholarship do not incur the 10% penalty for non-educational distribution. They are only subject to taxes on the earnings portion.
- Any 529 distribution that is more than the qualified expenses plus the scholarship amount, will be subject to the 10% penalty in addition to taxes on that amount?
- In previous years, we didn't take any or full distributions for the amt of annual scholarships bc we thought the $ would be needed for future years. Now there is extra money. Is there anyway take 529 distributions for the scholarship amounts from those prior years (2017-2019), so as to avoid the 10% penalty, and if so, how to do this in Turbo Tax bc this years 1098-T will only show the scholarship from this year.
- Thanks for any help! Much appreciated.
‎December 29, 2021
1:40 PM
