Prior Year Distrib-TP

Forum|Forum|1 year ago
February 28, 2025
2 replies
25 views

I'm doing my daughter's tax return using TurboTax and it looks like again she qualifies for the lifetime learning credit .... this would be the second year. However this time upon review a screen popped up that says check this entry. It says interest income worksheet prior year distribution-tp must be entered and it shows a form where it seems to show the 1099Q distribution amount for this year from schedule Q and then it seems to want me to put in prior year distribution....??? So this year it's about 18K last year looks like it's about 15K ...is that what I'm supposed to type in and how will it affect anything?

TurboTax Home & Biz Windows

confusedrfAuthor

Level 6

..... And then it asks for excess contributions in 2024. What does that mean?

I put zero in for now but it recommends a re-review and then it asks for contributions made 2023 and earlier.. again what is this The sum of everything we put in the 529 plan I am lost?

As an FYI I put in the 15K I mentioned in my first post and zero for the next two amounts mentioned in this post... nothing seemed to change after yet another review but I like to know what I'm supposed to put in there before I file.

KrisD15

Level 15

If the distribution was used for paying education expenses, and the student (or the taxpayer claiming the student) is also eligible for an education credit, there are options.

Part of the distribution can be claimed as income to free-up expenses for a credit.

It sounds like this is what's happening in your situation.

(When you click "Maximize my tax break" TurboTax decides, you can search letme and change if desired)

The program is asking the questions in order to determine your basis in the education savings account.

The 1099-Q shows earnings for the distribution, but the program wants to determine the earnings in the account balance.

IRS Pub 970 page 45 explains the calculation

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confusedrfAuthor

Level 6

All distributions have been edu expenses since inceptions 6 years ago...in fact money is running out!

So for the original prior year distrib to...I just put in the 15 that was in the 2023 Q, It corresponds to the 2024 18k on the Q form?

Still confused as to what these other 2 mean...

excess contributions in 2024. What does that mean? Is that on the form...excess of what..we did not withdraw more than was used for edu ...should this be zero?

it asks for contributions made 2023 and earlier.. again what does this mean..contrinutions? Contributions to what..where do I get this info. I am lost?

confusedrfAuthor

Level 6

I'm going to close this post. I think I'm okay now. I may open another post for others in this quagmire since the software is pretty much horrible when it comes to interviewing you for education expenses etc.

Amy you were correct. I deleted everything and started from scratch and when it prompted me about the Q form I said no but did enter the T form which is a bit of another story ...trying to find it etc... and enter the T info.

At that point essentially I had $2,000 added to my tax refund which I believe was from the life time learning credit.

However... I have entered the Q for 6 years... right or wrong ...and I was determined to enter it again. Whether I've left money on the table for 6 years or not I don't know but I wanted to be consistent. Bottom line when you put that Q form in... at least for me it results in me losing a few bucks because I believe it's taking a portion of the 18K used for education expenses and I believe it'sallocating $1k for that credit to get the $2k LLC.. but then that leaves a little bit of money that I distributed taxable. Thus I lose a few bucks of my refund. Now this may be where people get into entering room and board and whatnot but I've never done that. Perhaps I should have perhaps I would have got back an extra 50 bucks or so each year I'm not sure.

So which number is technically right and which number is wrong...? I believe this is where people say you can put room in board and what not and keep those few dollars... I've never done that so I'm going to be consistent and perhaps error on the side of being a little conservative.

For now I'm leaving at be... it's still prompted me on that one form for the 2023 and prior distributions and I left it blank... mathematically it does does not seem to impact the value on that form and I'm not even sure if that form is part of the tax return.

I know everybody's sick of this at this point I'm not sure if this makes sense but unless somebody sees something glaringly wrong I'm moving ahead and filing.

BrittanyS

Level 12

Yes, if you had room and board or other qualifying expenses, you can enter that information to reduce the remaining taxable income from the 1099Q. This will reduce what is being calculated as taxable income. As long as you have qualified expenses to add such as room and board, it is okay to add those items in to reduce the taxable income.

For more information see the link below: