1. It sounds like he has more unearned income from the Q. You don't need to add it to your return if he is not required to file a return, from the kiddie tax rules 🙂
2. If he isn't required to file, it just goes by. That's why the IRS has limits and points of - it just isn't worth dealing with this small of an amount. He is there.
3. Whoever claims the student claims the 1098-T and the education credit - since he is your dependent and you don't get the credit, you won't need to add the 1098-T.
4. The 1099-Q is in his name and is his responsibility to report income. It is passive- unearned income - which leads me back to the kiddie tax potential. If he meets the limit to file a tax return, then he should file, Filing requirement.
5. You need a recording of how you went through your calculations to determine where the money went and what is taxable. Keep it with your tax records in case the IRS ever asks. You also have our conversation here.
6. You aren't going to like my answer. It is your fault that you made the payment too late for the December amount to be applied. It is a hard lesson learned. Many of us make that mistake the first time.
You are doing a great job teaching your son many valuable lessons!
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