KrisD15
Expert Alumni

Education

Yes.

The consensus of most TurboTax education specialists is that you MAY ignore entering the 1099-Q. 

 

Previous TurboTax answer

 

Going forward, you can have the funds transferred directly to the school.

The 1099-Q does not need to be entered IF it does not create a tax liability. 

Technically you made a distribution in tax year 2021 for expenses paid in 2022. 

The TurboTax program won't let you enter it tax-free without matching expenses and you didn't pay the matching expenses until 2022. 

 

The distribution may be used tax-free for paying room and board, can you apply those expenses for tax year 2021? 

 

The INTENT is to allow the distributions to be tax-free when used for education expenses. The instructions allow a credit to be carried back, but not forward. So a distribution made in 2022 could be applied to 2021, but the instructions do not address applying a distribution made in 2021 to expense paid in 2022. 

 

If you don't report the 1099-Q, be sure you are careful about following the numbers trail since there will be more expenses reported on the 2022 1098-T than you would be allowed to claim since you are using part of that amount on the 2021 distribution. 

 

[Edited 2/21/2022 I 7:11pm PST]

 

 

 

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