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I have a 1099-Q distribution showing as partially taxable, despite having a 1099-T Tuition expense exceeding the amount on the 1099-Q. Why?? No other aid received.

I the parent am listed as the recipient of the 1099-Q. My daughter is the beneficiary, and also the student listed on the 1099-T.

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New Member

I have a 1099-Q distribution showing as partially taxable, despite having a 1099-T Tuition expense exceeding the amount on the 1099-Q. Why?? No other aid received.

The 1099-Q has to be entered.  Then when the 1099-T is entered, as you Continue through the interview for education expenses, you are asked how much of the expenses you want to apply to education credits.  You can only use the expenses for a credit or to make the 529 distribution nontaxable, not both.  Apparently you didn't answer this question or answered it in a manner that did not leave enough expense to cover the whole distribution.  The most you need to maximize education credits is $4,000.


See lines 17 and 18 of this Student Information Worksheet.  Click Forms on the upper right, then the worksheet on the left.

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New Member

I have a 1099-Q distribution showing as partially taxable, despite having a 1099-T Tuition expense exceeding the amount on the 1099-Q. Why?? No other aid received.

Something still not right. I have followed your instructions below. Because of my income level, I am NOT asked how much I want to apply to education credits. It tells me, I'm not eligible for any credits. That's fine. I'm just trying to make the distribution on the 1099Q non taxable as tuition paid exceeds the distribution.  So I looked at lines 17 and 18 of the worksheet. It had 10,000 entered as being used for credit or deduction. That then cause the next section to have an "excess" distribution, and makes part of it taxable. So I entered 0 in that box. It made the entire distribution non-taxable. Is that ok???