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Education
I have the same issue; I requested disbursement prior to year end and got a disbursement on Jan 2. How does IRS deal with prior year disbursements that get paid on the next year? In our case, the disbursement doesn't make sense the following year because student took time off to go and work rather than continue school. Additionally, our Virginia 529 plan has specifics to say that we have until March 31 the following year to claim disbursement for qualified education costs during the prior year. However the turbotax software does not account for that. It's specific to the year the disbursement is made. This little error is costing $2K in tax returns (with unqualified disbursement and 10% penalty costs).
‎April 9, 2021
12:36 PM