KrisD15
Expert Alumni

Education

You can either

enter the 1099-Q and 1098-T into your program and let your program do the math

or

not enter the 1099-Q at all, then lower Box 1 on the 1098-T by the amount of the distribution IF NEEDED

 

or

not enter the 1099-Q at all and report that amount of the distribution as aid not enter on a W-2 or other tax form IF NEEDED

(this would only be needed if you can't allocate all the distribution to room and board)

 

Distributions from a 1099-Q can be used for room and board but room and board expenses can't be used for a credit, so always allocate the distribution to room and board first. 

 

SOMETIMES, having the student claim some of the distribution will allow you to get a larger amount of credit.

If you are claiming the American Opportunity Tax Credit on your return, that credit maxes out with 4,000 education expenses, so trying to claim any more than that is silly

 

IRS PUB 970 has some great examples and advice

According to the IRS Pub 970 

“Generally, distributions are tax free if they aren't more than the beneficiary's AQEE for the year. Don't report tax-free distributions (including qualifying rollovers) on your tax return.”

 

 

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