Education

I appreciate this thread.  I'm in a similar situation with Spr21 payment made in Jan21 (per the school's due date), but may have messed up last year for TY2019 as well.  And significant change in tuition & scholarships due to covid.  I'm wondering if I should amend 2019 before filing 2020 to get it all sorted out...  appreciate you reading my details below and giving any input.

TY2019 -

Spr19 son took 4 community college classes

Sum19 son took 2 more classes, 1 at CC, 1 at his new university

Fall19 son was full time at his university, commuting from home, plus had 1 class at CC. He earned 1/2 scholarship, so bills were twice what we had to pay

Paid CC bills & Fall19 univ tuition bill out of pocket, requested 529plan reimbursement just for univ tuition paid.   Didn't request 529 funds for other 2019 expenses because didn't need it, and read articles that there isn't technically a law requiring you to take reimb at same time (law proposed as far back as 2008, but not actually enacted, right?)

Spr20 semester, paid tuition on 12/30/19 on visa to get rewards points.  Paid room & board on Jan 11, 2020 (he only found out they had a room for him on 1/5/20).  Requested reimb for all of Spr20 tuition, room & board in late Jan 2020 so I could pay off that visa by due date.

2019 CommColl 1098T Box1 = tuition paid for Spr19, Sum19, Fall19; no scholarships

2019 univ 1098T Box1 = fall19 total tuition billed + spr20 tuition paid (I think that's the math)  Box 5 shows the scholarship of 1/2 fall19 tuition and Box7 is checked (it incl amounts for Jan-Mar2020)

2019 1099-Q = my reimb request for the Fall19 tuition only, there were earnings over the basis.

In TurboTax for TY2019, me being a noob to this whole area (but a long time TT user), I entered both 1098-T and 1099-Q exactly as is, there was no change to my taxes due.  I didn't even know about AOTC and didn't qualify for it last year anyway due to unexpected 1-time bonus from a company merger.  My expenses on the 1098T were far above what I requested from the 529.

TY2020 -

Recall, Jan2020 - took 529 reimb for the Spr20 semester tuition & room/board, not for books; but apparently paying the bill on visa 12/30/19 doesn't match these together.

Mar2020 - son is sent home due to pandemic, school reimb a portion of room/board

Sum2020 - son took 1 online class, I paid out of pocket, didn't request reimb

Fall2020 - son enrolled full time, classes all remote and happily the univ steeply discounted tuition, scholarship much much lower because tuition was so low for online only classes; paid tuition bill, requested reimb from 529.

Dec2020 - Spr21 bill is issued, but not due until 1/5/21; again steeply discounted tuition, very tiny scholarship.   Son living on campus again for Spr21.  I paid this tuit & room/board bill in Jan2021, and reimb myself from 529 in Jan2021 for all.

2020 1098-T Box1 = approx $500 more than what I reimb myself from 529 in 2020!  I think Box1= remaining Spr2020 tuition billed that was covered by the 1/2 scholarship + Sum20, Fall20, and Spr21 very low tuitions; Box 5 has the large 1/2 tuit scholarship from Spr20 + the small Fall20 scholar; and box7 is checked.   So the Box1-Box5 implies I paid even less since the Spr20 large scholarship is on there.

2020 1099-Q = my reimb requests for spr20, fall20 with earnings above the basis

When I enter these forms as-is into TurboTax, it says I owe tax on 811 of non-qual 529 distributions.  I only got it down that low by putting in room/board from Spr20 in full, plus a "living with parent" room/board # for the fall based on the school's published cost of attendance.

We do qualify for the AOTC this year, but due to the major mess up on the timing of 1098t billing vs my 1099q disbursements, we aren't getting it.

OTOH, if I just leave both of these forms off my return entirely, I owe less since I don't have the 811 of non-qual 529 distribution.  Still don't get the AOTC since 1098 isn't filed.

I'm prob not the only 1st time college parent to screw this up, but I'd like to know if I can do anything to "fix" my situation going forward.   Should I amend TY2019 to flat out remove the 1098t & 1099q?  Would this make it better for me to leave these forms off my TY2020 return?    Sure, I'd like to get the AOTC, but if I can't then so be it.  I've spent way more on QHEE in 2019 &  2020 compared to what I reimbursed from the 529 and I feel that I'm being penalized for timing of payments around 1/1 each year.  

If you've read this far and understand what I'm dealing with, you are a saint.  Appreciate all thoughts.  I've spent about 9hrs trying to figure this out over the past 2 days since finally getting the 1098T from his univ.  If 1098t & 1099q are informational, should I just leave them out this year?