Good Lord! Reading through this thread it seems a multitude of people have gone out of their way to make what is obviously simple (to me) as complicated as possible. I refer to this proccess as "complixified simplification". The opposite would be "simplified complexity". 🙂
From what I gather in this thread, the following things are true
- The student qualifies to be claimed as a dependent on the parent's tax return.
- The student is "in fact" being claimed as a dependent on the parent's tax return.
- The total qualified education expenses paid in 2019, exceeds the total of all scholarships, grants, 529 distributions received in 2019.
If all the above is true, then the parents claim "ALL" on the parent's tax return. Period. End of story. One additional note here concerning 529 funds.
Scholarships and grants can be used for the qualified education expenses of tuition, books, and lab fees. That's it. There are no exceptions.
529 funds can be used for the qualified education expenses of tution, books, lab fees *and* room and board.
Out Of Pocket expenses can be claimed for the qualified education expenses of tuition, books, and lab fees. That's it with no exceptions. Out of pocket expenses can *not* be claimed/deducted for room and board.
So if the three things I mentioned above are true, then the parent should claim "everything" concerning education on the parents tax return, and be done with it. That would include the 1099-Q.
What if I don't claim the 1099-Q?
If you used the 529 funds to pay *qualified* education expenses and don't report that 1099-Q, then you are telling the IRS that you paid the amount on the 1099-Q "out of pocket". That would not be true and would be fraudulent.
The fact that the student's SSN is on the 1099-Q doesn't matter here, because the student's SSN is already on your tax return as your dependent. So this is not an issue.
