Do I need to report the 1099-Q from a NY State 529 plan on my Federal Tax Return if the qualified expenses exceed my gross distributions?

[coladan1]

I am in the process of doing my Federal Tax Return and I am stuck on an issue.  I have paid over 16,000 in tuition, fees, and room and board for my son who is a college student.  However, I did receive a 1099-Q from his state 529 plan for a gross distribution of 14,000.  I don't believe that I need to report this on my Federal return.  However, when I did.....it reduced my refund by a lot.  Just need to know if I can NOT report the 1099-Q on the federal given the above.  Thanks

[ToddL · Accepted solution]

You must report the Form 1099-Q on your federal tax return, but will also have to report your child's qualified education expenses to avoid any additional tax or penalty as a result of the distribution.

Enter the 2017 Form 1099-Q in the "Coverdell ESA and 529 qualified tuition programs" interview found under Federal Taxes > Wages and Income > Less Common Income > Other Miscellaneous Income. The interview will ask, among other things, how much you received and if you used the money for qualified education expenses. 

You must then complete the Expenses and Scholarships (Form 1098-T) interview found under Federal Income > Deductions and Credits > Education.

Your answers to these two interviews will determine how much additional tax, if any, you may owe.

[MD-Taxpayer1]

Why did you say that you must report the 1099Q?  Was there something subtle the the question I missed?  (I'm not an expert)

TurboTax says you may NOT need to report the 1099Q

<a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tips/college-and-education/what-is-irs-form-1099-q/L7MAdcKz5">https:...>

If the distribution doesn’t exceed the amount of the student's qualifying expenses, then you don't have to report any of the distribution as income on your tax return.

[Gerry3]

The 1099Q I received was in my daughter's name. As such, I don't need to report it. She would be the one reporting it, if she were filing a tax return.