I am running into similar issues with 1099-Q and 529 distribution. I have posted a question related to this for another reason in the recent past. Here is the latest question
1) I have recd a 1099-Q for - I am the recepient and my daughter is the beneficiary.
2) She has recd a 1098-T for the tuition that was paid in 2020.
3) There are other expenses for room, board, and books.
I have paid for 100% of her expenses. She has not recd any scholarship. My total distribution from 529 is little under the sum of tuition fees and other expenses. Yet, when I enter 1098-T, it doesnt give me credit for it. I understand that I wouldnt qualify for either of the learning credits. But as long as the total expense is more than what I got back from 529, my tax bill should be zero. TT is not including the amount on 1098-T as a qualified education expense.
It states that due to my income I cannot take the tuition credit, but I think that is valid for American Opportunity or other types of learning credit. That is a different issue.
I have seen on this forum that if I know that the expenses are greater than the distribution then just delete these forms and not report it. Can I do that? Doesnt the 1099-Q go to the IRS? Help please.
