Q. Should those monies be transferred to my child directly who is making the actual payment in the next few days?
A. No. There's no rush since it won't be done in time to send the money directly to the school. Since the tuition payment was made in 2025, the withdrawal from the 529 plan can be done anytime before 12-31-2025 and still be a qualified distribution.
For 529 plans, there is an “owner” (usually the parent, but can be anyone including an aunt), and a “beneficiary”. The "recipient" of the distribution can be either the owner or the beneficiary depending on who the money was sent to. When the money goes directly from the Qualified Tuition Plan (QTP) to the school, the student is the "recipient". The distribution will be reported on IRS form 1099-Q. Note: the payment can not be sent to you (the parent of the student). You are neither the beneficiary or the owner.
The 1099-Q gets reported on the recipient's return.
Alternatively; you can just not report the 1099-Q, at all, if the student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms.
