Colleges work in academic years, while the IRS works in calendar years. So the fact is, it takes you five calendar years to get that four year degree. With that said:
- Qualffied education expenses are claimed in the tax year they are paid. It *does* *not* *matter* what tax year is paid *for*.
- Scholarships, grants, 529 withdrawals are claimed as taxable income (initially) in the tax year they are received. It "does" "not" "matter" what tax year the money was received "for". (the taxability of the funds are offset and "cancelled out" by the qualified expenses they are used to pay for.)
We withdrew from child's 529 a/c AND PAID her law school tuition for fall 2019 and spring 2020 in 2019.
Then the withdrawal amount that was used to pay "qualified" as well as allowed expenses is not taxable. Period. End of Story.
Since you took the withdrawal in 2019, and made the payment in 2019, you're good to go. What the school says, or what the 1098-T says is totally and completely irrelevant. After you enter the 1098-T in the program, later screens will ask you for information that was not included on the 1098-T. You enter it there.
When the school credits the payment is also irrelevant. What "is" relevant is when you can "prove" you made the payment. Assuming you have a receipt, or can show the transaction through some other method (such as a bank statement showing a transfer directly to the college) this should not be an issue.
