Q. To clarify, the full $5650 from our 1098-T should be entered on Form 8863 and used to claim the Lifetime Learning Credit?
A. Yes.
Q. The $6 earnings portion of the 1099-Q should be input as income on Schedule 1, line 8z. Correct?
A. Yes. The description will be taxable portion of 529 distribution (or some such wording).
Q. No 10% penalty required since all of the $5060 529 funds were used for education and we are claiming education credit?
A. Yes. The $6 goes on line 6 of form 5329 to claim the exception to the penalty.
