1099-Q Data

Forum|Forum|5 months ago
February 8, 2026
1 reply
47 views

Turbotax 2025 does not handle the entry of 1099-Q data properly. Funds that are used for approved educational expenses in accordance with the 529 program should not show up as taxable income on Form 1040, line 8; yet they do!

DavidD66

Level 15

Cam you clarify your situation? Is the beneficiary of the 529 Plan you (or your spouse), a dependent on your tax return, or a non-dependent?

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bobmcleod21Author

Level 2

Beneficiaries of 529 funds were grandchildren (4). They were not dependents. All proceeds were used for approved education expenses.

thank you,

[PII Removed]

SharonD007

Level 14

If all the distribution exceeded the educational expenses, the 1099-Q doesn't need to be reported on your tax return.

The 529 distribution (reported on Form 1099-Q) only needs to be reported on the tax return of the person whose SSN is on the form if the withdrawal is more than the tuition paid in Box 1 of the 1098-T plus other adjusted qualified educational expenses. In that case, the earnings on the excess distribution would be taxable income.

First, determine if the Form 1099-Q needs to be reported on the tax return by comparing the withdrawal with the tuition paid on the 1098-T added to other qualified educational expenses. To find out what are qualified educational expenses, review the IRS Tax benefits for education: Information center. Refer to the TurboTax articles Guide to IRS Form 1099-Q: Payments from Qualified Education Programs and What is IRS Form 1099-Q? for further details.

Secondly, enter the 1099-Q if the withdrawal exceeds the educational expenses by following the directions in the TurboTax Help article Where do I enter a 1099-Q?

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