I paid 'Qualified' expenses for a beneficiary who attends a university (it is very simple - she has no scholarships or grants). Since I am the account owner of her 529 plan, I claimed, and received, full reimbursement for these qualified expenses from the 529. Accordingly, I received a Form 1099-Q, correctly showing me as the "recipient" of the distributions.
Now, I am using "TurboTax Home and Business 2024" on a Windows PC. Under "Your Deductions and Credits" is a section called "Education", with a subsection called "ESA and 529 qualified tuition programs (Form 1099-Q)". As I correctly answer the questions in this section I am being asked to enter information from my Form 1099-Q. At no point does TurboTax ever ask if the distribution was qualified, but it obviously treats the distribution as being NON-qualified, because as soon as I enter the 'earnings' from the distributions those red numbers at the top (for taxes due) shoot up by many thousands of dollars, causing my pulse to shoot up even higher.
However, based on reading responses to other questions regarding Form 1099-Q, it seems clear that I would not be responsible for paying taxes on qualified distributions, or even to enter the Form 1099-Q into TurboTax, for this situation.
What am I missing here? Or, did TurboTax somehow completely forget to make it even slightly clear in their product that the User need not even bother with the 529-plan and Form 1099-Q related sections of TurboTax when completing their returns when distributions were 'Qualified'?
