I have 529 Plan in WI opened for my daughter (full time student, age 20, claimed as dependent on my tax return). I withdrew money from the 529 plan to be deposited on my checking account which I used to pay her Tuition expenses (my personal check to University). This 529 Plan withdrawal was less than Tuition amount (Qualified Educational expenses). I got 1099-Q on my name from 529 Plan and my daughter received 1098-T from College. While preparing my tax return I entered info on educational expenses and then I entered 1099-Q information and my tax calculated by turbo tax went up after I entered info for 1099-Q. Looks like, that portion of the distribution was added to my income. Please, could you tell me why? 529 Distributions should not be taxable if they do not exceed qualified educations expenses. Why do I need to pay taxes on that 529 distribution?
