When the beneficiary enrolls in school and starts taking distributions to pay school expenses, he will begin receiving a Form 1099-Q each year. And as long as the distributions are used to pay only qualified education expenses, the beneficiary doesn’t pay income tax on the distributions.
However, when distributions exceed qualified expenses a part of the distribution is taxable.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
