Q. Given what TurboTax's message say the beneficiary must report her income, can I pay that in my return, or must I create a new return for my daughter?
A. No. If she is the recipient of the 1099-Q, it must go on her return.
Q. Does my daughter need to file her own return anyway because adding the two box 2 "Earnings" amount above, it goes above $12,550?
A. If her income consists of taxable earnings from a 529 plan, the filing threshold is only $1100. The $12,550 number is for earned income. 529 distributions are unearned income, with a lower threshold
Q. Reading some answers, it sounds like sometimes 1099Q do not need to be entered. But what situations should we entered them then?
A. When you have determined that some of it is taxable. See example at my other reply. There is no more risk of an IRS inquiry from not entering the 1099-Q, because nothing is sent to the IRS even if you enter it, when TT determines that none of it is taxable.
