RaifH
Expert Alumni

Deductions & credits

Your Spring 2021 tuition was not included on this year's Form 1098-T because it was included on last year's. Just as your Spring 2022 tuition was included on this year's Form 1098-T. 

 

This year, since you took the distribution from the 529 to pay for both spring 2021 and 2022, it muddies the water a little bit on how to report the distributions to accurately line up with the expenses. The IRS does not clearly state that 529 withdrawals have to be used for expenses incurred in the same year. If you used a 529 withdrawal for an expense that was reported in 2020, that is not disallowed, as long as the distribution was used entirely for qualified education expenses.

 

If that is the case, you can just not include the distribution used to pay for spring 2021 as a 1099-Q withdrawal this year. If the IRS were to question why it was not included, you would need to provide proof that you paid qualified education expenses incurred in 2020 with this distribution. You would not need to amend your 2020 return as it would not change anything on it, as long as no part of the distribution would be taxable or you claimed an education credit in 2020 that you would not have been eligible for if you had included the 529 withdrawal on your 2020 return.