- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Education
The straight forward approach is: do not enter the 1099-Q, at all. None of it is taxable. You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board to cover the distribution. You have done the math to determine that there is enough expenses left over for you to claim the tuition credit. When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records.
On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution."
- ''Son does have tax liability... had earned income and Turbotax (TT) is still including the AOC credit".
TT should show the non-refundable portion (up to $1500) of the AOC on line 3 of Schedule 3. It should not be showing any refundable AOC (line 18c of form 1040).
If an amount is shown on line 18c, you should go through the personal info section again. In particular, the question did you (your son) provide more than half your own support with earned income. Answer no.
- "529 distributions went to the college tuition bills"
No, the 529 distribution did not go to any thing, specifically. It was only distributed. You may count it as going to any college expenses. So, you count it as going to room and board and computers, because tax free scholarship cannot be used for those items, and 529 money can. R&B cannot be used for the tuition credit, but the tuition, your free up, can.