I am an owner of a 529 account which I set up for E, my granddaughter. E is now a full time student and also works part time. She files her own tax return and is not claimed by her parents as a dependent.
For the year 2024, I withdrew $29,053 from the account which I used to pay for E’s tuition and a few other qualified expenses. The 1099-Q was issued to me with me as the recipient. E received Form 1098-T from her college in the amount of $29,950.
Discussions on this forum dealing with the same situation suggest that I DO NOT report the 1099-Q on my own tax return, as long as I have good records of what I spent on behalf of E’s, in case of the IRS audit. Instead, E is to report the 1099-Q on her return, as well as the 1098-T to offset the distribution. I wanted to confirm that my understanding is correct.
My question is whether E will be qualified for education credit.
Your advice would be greatly appreciated.
