Hello everyone,
Our Son received a full scholarship in 2024 which paid for everything including his room and board. Since his entire college bill was covered by his scholarships; our state 529 plan would not make a payment to his school directly as they had done in the past. Instead, they sent the reimbursement check to me (the parent) and the Form 1099-Q was also issued to my social security number. Under my Son’s Turbo Tax (“TT”), I chose that he did NOT receive any Form 1099-Q (since 1099-Q was issued to me). Under the parents’ TT, I chose that I was the recipient of Form 1099-Q and the 529 plan distributions were used to pay for the education expenses of my student. Also, under our TT’s education expense input forms, I entered that $20k of the scholarship funds were used to pay for room and board.
My questions are as follows: 1-Is it correct to answer in TT that the 529 plan distributions were used to pay for the education expenses of the student even though the distribution was sent to parents directly instead of the college?
2-Our 1040 does NOT show the earnings per Box 2 of Form 1099-Q, as “Other Income” on Sch 1, line 8z, even though we received the Form 1099-Q. Is that a correct treatment? Is it because the earnings from the 529 plan were applied towards the room and board expenses thus making the earnings tax-free and therefore, not required to be shown as “Other Income”?
Thank you in advance for your time and expertise.
