I am unsure what amount to enter for "Amount Used to Calculate Education Credit" on my son's tax return. He has an Educational Savings Account (ESA) from his grandparents and a 529 plan from us, his parents. The ESA funds were in his name and used to pay for education expenses, while the 529 plan funds were received by us and used to pay for part of his education expenses. We, the parents, did not qualify for or take any education tax credits.
Regarding the ESA and Qualified Tuition Programs section, we received two 1099-Q statements: one where my son is the recipient/student (ESA) and one where he is not the recipient (529), but still the student. I reported the 529 plan on my tax return (parent's return) with all qualified education expenses. Additionally, we reported both the ESA and the 529 plan on my son's tax return along with all qualified education expenses. I did indicate on my son's tax return that the distribution recipient for the 529 plan was "Someone else not listed here."
When I worked on the Expenses and Scholarships (Form 1098-T) section, it prompted a message stating that I was trying to enter education credits for myself, but I had earlier indicated that my son was claimed as a dependent on someone else's return. Finally, under Education Information, the program noted that if the person claiming my son as a dependent also used some or all of the education expenses for a tax credit, I would need to indicate the amount used for the credit because it might make part of the distribution taxable.
The "Amount Used to Calculate Education Credit" field is defaulting to 10k, which results in my son owing additional taxes even though the 529/ESA was less than what we spent on qualified education expenses. Should I enter 0 in the field or leave it at 10k?
Please note that this was submitted and if I change it -- I will have to send in an amended return and will need short wording as to the issue.
