My 2023 1099-Q shows a $20k distribution discrepancy vs. the 1098-T because the distribution happened in Dec. but the tuition payment hit in Jan. How do I handle this?

[gray398034]

I want to avoid paying taxes on the entire 2023 distribution since 100% was used for college expenses, but timing-wise a big part of the expenses covered by the distribution ended up being paid on Jan. 2 in 2024.

[AmyC]

No problem. The IRS understands and has an exception. IRS Publication 970, Tax Benefits for Education states:

If the entire 1099-Q went to qualified expenses, room and board, tuition, etc then you do not need to enter the form. Tuition paid for the first 3 months of the next year also qualify, see page 12, What Expenses Qualify, and page 52 for qualified distributions.

Please read another post of mine for a potential increase in refund.