@MAY17 said: "Parent name is recipient, so I can't just leave the 1099Q off my return or I will get audited"
Yes, you can (and should) and no, you have no more chance of being audited for doing so.
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."
The 1098-T and 1099-Q are only an informational documents. The numbers on it are not required to be entered onto your tax return.
You claim the tuition credit, or report scholarship income, or exclude 529 plan earnings based on your own financial records, not the 1098-T and 1099-Q. In the 1098-T screen, click on the link "What if this is not what I paid the school" underneath box 1. You will then be able to enter the actual amounts paid.
At least two users have reported receiving a CP2000 letter, from the IRS, on 529 distributions. They replied that their child was in college and the distributions were for qualified expenses, which they listed, but they did not provide receipts.. They later received a notices saying they were in the clear.
