We took a distribution from a state-sponsored 529 plan toward eligible expenses for my dependent’s college education. After entering the 1099-Q data on my return, I receive a message that “Based on the educational expenses you’ve entered, the student beneficiary must report $356 of taxable income from this distribution.” When we complete my son’s return, the message is that he should not claim it but I should.
You can see why I am confused! Which is it, please?
Notes:
1. My 21-year old son is a dependent, working toward his first bachelor's degree.
2. The expenses were eligible and there was no refund.
3. His AGI is $2,400.
PS: I acknowledge that it isn't "necessary" to include this because the expenses in this case were eligible but I want to understand the "right" way.
