Hal_Al
Level 15

Education

Q.  Could he just safely not report the 1099-Q under his SSN on his return? 

A. Yes, that is exactly what he should do.  You also should  not report the 1099-Q on your return either**. The TurboTax interview and your situation  are just too complicated (it does work when everything is done just right). Don't enter the 1098-T, on either return either.  

You can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. 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 is only an informational document. The numbers on it are not required to be entered onto your tax return. Receipt of a 1098-T frequently means you are either eligible for a tuition credit  or possibly your student has taxable scholarship income.  You don't have either.  Books cover the minor difference in $amounts.  Room and board also qualify for a 529 distribution.

 

Yes, the 1098-T can be entered on both returns, with adjustments, when needed.  But don't do that in your case. 

 

** Note that JillS56's long write up also states **Alternatively; you can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. 

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