Q. Is my assumption that the earnings aren't taxable correct?
A. Yes, as long as you didn't withdraw more than $10,000 per student.
Q. How should I report the 1099-Q info?
A. Don't enter the 1099-Q, if you know the entire distribution was used for qualified expenses. The 1099-Q is only an informational document. It is not required to be reported, because you have determined that the taxable amount is 0.
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."
