wings9798
Returning Member

Turbo Tax Says Parent Owes 1099-Q Disbursement

The parent received a $10k disbursement from a 529 plan.

Basis $6812

Earnings $3187

 

The daughter (Student) had $18000 in education expenses. Why is Turbo tax adding $1500 to the parent in a tax that needs to be paid. If i say the receipeient is the daughter then TT is saying the daughter needs to add $3187 on their tax form as income.

 

I thought 529's were tax free if used for higher education expenses, these were.