I used a distribution from my son’s 529 plan to pay for his college. Every dime went to his schooling. I was listed as the recipient on the form and my son is the beneficiary. I just withdrew the funds needed for his bill and supplies due (I have the receipts) and paid them. He got a refund for 1500 which I even redistributed right back into the 529 account the next day to save for his next semester. I entered the 1099Q in exactly as written, yet turbo tax is saying over 2000 will still be taxed. He received no outside scholarships. TurboTax says I make too much to claim tuition and expenses! 106000 now since they tacked on this darn 2000+ upping my gross income so they can tax me on it. All aid and scholarships given to him came directly from the school. Why am I being taxed? I thought all distributions were tax free as long as they paid for school! We did just that! Is this because his father will claim him? We are not married, just separated, but we get along. We alternate claiming our son from year to year. He is due to claim him this year. Need help. I don’t want t to be taxed if I did everything right. I would have never opened this thing if there was a chance I would be taxed. I would have been better off saving the money and paying directly!
