I'm filing my daughter's tax return. She is a college student. She received a 1099-Q from the 529 plan that I had setup for her with the following information
1 Gross Distribution: $xxxx
2 Earnings: $yyyy
3 Basis: $zzzz
I noticed that Turbo Tax is calculating a tax of 10% on the Earnings of $yyyy. It is my understanding that the growth in the 529 plan is tax free, so there shouldnt be any taxes.
Thoughts on why this is occurring and how to fix?
