Hi tax experts,
I have read several threads about tax issues related to excess contribution to Coverdell ESA. I find myself in a similar condition and need some help. We over contributed to our two kids' ESA accounts in 2020 and 2021. I realized the issue last year and removed all the excess contributions in 2023. As a result, I have two 1099Q forms, one for each kid.
My questions are:
1) I am using TurboTax premier CD version to file my tax. While I was able to input the numbers in the Coverdell ESA section, it appears that TurboTax did not provide me with the correct results. The worksheets show that the distributions were treated as if the excess contributions had occurred in 2022. Nowhere did the software prompt me to input information for the prior years 2020 and 2021. Did I miss something?
2) I saw experts mention that qualified education expenses, such as tuition, can correct the excess contributions to avoid the 6% tax each year. I have read Publication 970, Chapter 6, but was unable to find the relevant discussion. Could someone please suggest where I can find this information?
3) For the qualified education expenses, can I use tuitions in prior years 2021 and 2022? Or the qualified education expenses must occur in the same year as the distribution, in my case 2023?
Thanks for your help!
