Form 1099-Q lists grandfather as recipient instead of student name. How can I correct it?

[JaimeG · Accepted solution]

The owner of the account must communicate with the managing agency and have them change this detail to reflect that the School or the Beneficiary are the recipients of the distribution.

You must use the information from 1099-Q in TurboTax as if it reflected the beneficiary as the recipient (Don't forget to enter Qualified Education Expenses). Nevertheless please keep in mind that this situation can present issues with the IRS. They are not major issues but since the first layer of the IRS is a computer. Sometimes the computer will interpret the distribution as income to the contributor if the 1099-Q reflects that he or she is the recipient. It is easily cleared up but nevertheless it is time that one will never get back. To avoid this make the change suggested above as soon as possible.

Qualified Education Expenses (for Coverdell ESA and 529 Plans)

• Tuition and fees;
• Books, supplies and equipment; Computers and Software
• Room and board expenses for students enrolled at least half-time only to the extent they are not more than the greater of
• The allowance for room and board included in the cost of attendance for federal financial aid purposes, or
• The actual amount charged if the student resides in housing owned or operated by the eligible education institution; and
• Expenses for special needs services required by a special needs beneficiary and incurred in connection with enrollment or attendance.