I am the parent and owner of the 529. The student is my dependent son- a junior in college. We are not using any of the 529 plan for him (even though he is the designated beneficiary) because his scholarship covers more than his tuition, room and board. The student paid some tax (on his taxes) on the portion of the scholarship that went beyond tuition and room/board. Box 1 of his 1099-T lists approx 20,00. Box 5 lists 27000 (no other scholarships nor 529 money). Scholarship is not restricted. Box 1 of 1099Q is 15,000. Box 2 is 5,552.94 Parents name and social security number are on the 1099Q. Parent not eligible for tuition credit
My question is, since I (the parent and owner of the 529) withdrew money for other purposes (I the parent am the beneficiary listed on the 1099-Q) how do I (the parent) correctly enter in turbotax this withdrawal on my taxes so that I pay taxes on the earnings but NOT the penalty for withdrawing money for unqualified expenses (since my son's tuition and room and board are more than covered by his scholarship.)
