We wired the payment for the Spring semester from our Smart529 in December 2025. As the result of it 1099Q showed 15000 gross distribution. 1098T showed box 1 - Box 5 expenses 10000 as if there was no charge for Spring semester in December 2025! All direct wire payments from 529 were for her dorm room- qualified distributions. Should we report 1099Q on our daughter return, and pay penalty for 5000 excess distribution?
All the distributions were direct wire payments from 529, and we have statements from the account as well as charges and payment history from MIT.
What should we do?
