I am the owner. However, in this case the administrator mailed the 1099-Q to the student beneficiary, a dependent on my tax return. I am currently taking the educational credits on my return. This makes sense to me. However, when preparing the dependent student beneficiary's tax return, it appears to me that I am seeing a case of the tax consequences of the earnings as shown in box 2 of the 1099-Q being switched from me, the owner, to my student beneficiary. Turbotax is treating the earnings as income on my student beneficiary's Federal return, even though the funds went directly from the administrator to the university exclusively for qualified tuition expenses. Not sure that this is correct. Are the earnings as shown in box 2 of the 1099-Q considered income on the dependent student beneficiary 's Federal return even if all of the earnings were paid for qualified tuition expenses?
