I am a grandparent who has a 529 account for a grandchild. I have taken distributions from the 529 account for the last four years to help pay for qualified education expenses. I make my payments directly to the college so they always equal or exceed the distribution so I have good record keeping of where the distribution goes. I am the recipient and the grandchild is the beneficiary. In 2021-2023 I always entered the 1099-Q in TurboTax and it never affected the amount of federal tax I had to pay. Now I have the 2024 TurboTax program and I am entering the 1099-Q as I have for the last three years, but now it is making some of the distribution taxable and increasing my federal tax. The grandchild is not my dependent so I can’t enter expenses to offset the distribution. I have talked to Tech Support and had the live online support that I paid extra for. No one can explain why the program is doing what it is this year and the best advice I got was to not enter the 1099-Q on my tax form. This is an option, I guess, but why did it never have an effect before and this year’s program is doing something different? Help is appreciated.
