My 1099-Q has an amount in box 1. This is money I had taken out of the Learning Quest 529 qualified education account. When I enter the number in box 2 under earnings it makes the taxes I owe on the federal side go up. Then I enter the amount in box 3 that says basis and nothing changes on my tax situation. I used the money for 100% qualified school expenses and have proof of that. Do I need to enter ANY of the boxes on my 1099-Q form or just totally ignore it. I feel I received the 1099-Q form in error. Why should I have to pay income taxes on the earnings when I enter it in box 2? Please advise how to proceed. Which boxes I need to enter if any on my tax return? My son is a dependent and attends college full time.
