I am entering my dependent's 1099-Q and 1098-T on my tax return and getting the following results:
1099-Q ESA Distribution = 25,544
30,258 in educational expenses (including room & board)
-$2714 paid by tax free scholarship
- 2,000 used to claim the AOTC credit TURBOTAX AUTOMATICALLY SET THIS AMOUNT
25,544 Can be used against the 1099-Q
I found another post that explained how to change the amount allocated to claim the tuition credit but it does not seem to apply to the Online version. How can I control how the QEE is allocated? Turbotax seems to be allocating to the AOTC. I may just leave it this way, but it would be nice to understand how to control it.
The other Post said to do this:
Go through the entire education interview until you reach a screen titled "Your Education Expenses Summary". Click edit next to the student's name. That should take you to a screen “Here’s your Education Summary”. Click edit next to “Education Information”. When you get to the screen titled “Amount Used to Calculate Education Deduction or Credit”, verify the amount you want to use or change it. You may reach that screen sooner. THERE IS NO screen titled "Amount Used to Calculate Education Deduction or Credit"
The other post also said Turbotax should have allocated according to the following:
"There are three things you can do with your Qualified educational expenses (QEE):
- Allocate then to scholarships (so that the scholarship remains tax free)
- Use them to claim an education credit
- Allocate them to the 529 distribution (1099-Q) so that it will not all be taxable
TurboTax allocates QEE, in that order, until you tell it otherwise."
