In my case, the distribution from 529 went to my daughter (1099-Q). If this is considered as her income, then she can pass the support test. When I (parent) said that she paid for more than half of her support, it gave her EIC, and also AOC refundable credit, recovery rebate. Is this right?
It feels like if she can claim 529 distribution as her income to pass the support test, she gets a lot of money back from IRS. If I make her my dependent I just get $500, since my income is outside the threshold!
Any insight?
