I have received a 1099-Q for my daughter’s college tuition for 2024. She turned 24 last October and had earned a gross income over $10K. TurboTax indicated that I cannot claim her as a dependent in my Federal tax return because of she made $5,050 or more last year.
Under Deductions and Credits for 1099-Q information, my daughter is no longer listed as a dependent and I had to choose “Someone else not listed here”. Then on the next screen, it allowed me to enter my daughter as the student whose education expenses were paid from the distribution of the Form 1099-Q.
Because the distribution shown on the Form 1099-Q was used entirely to paid, does this mean that I don’t have to paid the 10% penalty on the earnings even though she is no longer a qualified dependent?
In TurboTax, under “Summary of distributions”, it states “Here’s how the 1099-Q distributions for non-dependents affects your tax return:” and my daughter is listed with a $0 tax amount.
I just to make sure that this is correct.
