Do I need to enter the 1099-Q if it was for qualified expenses?

[MayaD]

No, you don't need to report form 1099-Q if it was totally used for qualified expenses.

[jentx71]

What about if I want to claim the American Opportunity Credit?  Do I then need to enter $4000  for box 1 of the form 1099Q ?  How do I figure out the other boxes then?   It seems like there should be a question when filling out the 1099Q section in turbo tax--are these for qualified expenses.

Thanks in advance,
Jenny

[DawnC]

No.  The 1099-Q does not generate any education credits, but Form 1098-T does.   To claim the American Opportunity Credit, enter your Form 1098-T into TurboTax and go through the Education Expenses section.   Keep in mind however, you can't claim an education credit for any expenses you paid for with the 1099-Q distribution.  

If you received a Form 1099-Q, enter it as you see it.   If you don't have one, skip that entry.  

If you have both, enter the 1099-Q before the 1098-T.    TurboTax won't ask if the distribution was for qualified expenses when you enter the 1099-Q.  But it will ask or all of your expenses when you enter the 1098-T.

Qualifications for claiming the American Opportunity Tax Credit are:

• You paid an eligible student's qualified education expenses for higher education at any college, university, or vocational school with a student aid program administered by the US Department of Education
• The eligible student is you, your spouse, or a dependent on your return
• For the full credit, your MAGI (modified adjusted gross income) is less than $90,000 ($180,000 if you're filing jointly)
  • For a reduced credit, your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you're filing jointly)