Turbo tax is counting my 529A distribution as income -is anyone else having this problem?

[LindaS5247 · Accepted solution]

529 plan distributions (reported on Form 1099-Q) are not taxable if used for qualified education expenses, such as tuition, fees, books, and room/board.  

Make sure you have properly entered your qualified education expenses in TurboTax and check all of your entries regarding Form 1099-Q and your education expenses.

If all funds were used for qualified expenses, you do not need to report the 1099-Q on your return. If you have already entered it, make sure you indicate the funds were used for qualified expenses to avoid taxation.

You can get to the Form 1099-Q screens in TurboTax to check your entries as follows:

1. Click on "Search" at the top right of your TurboTax screen.
2. Type "529" into the search box.
3. Click on the link "Jump to 529"
4. Your screen will ask if you received a Form 1099-Q for qualified tuition program distributions in 2025.
5. Follow through the TurboTax screens and enter your information regarding your distributions.
6. Make sure all follow-up questions are answered properly.

Qualified expenses are entered under "Deductions & Credits", "Education," "ESA and 529 Distributions."

You can get to Education Expenses screen in TurboTax to check your entries as follows:

1. Click on "Search" at the top right of your TurboTax screen.
2. Type "Education Expenses" into the search box.
3. Click on the link "Jump to Education Expenses"
4. Your screen will ask, "Did you have education expenses?"
5. Select "Yes" and "Continue"
6. Follow through the TurboTax screens and enter your information regarding your education expenses
7. Make sure all follow-up questions are answered properly.

Click here for 529 Plans and Taxes: Deductions, Tax-Free Withdrawals & More

Click here for Guide to IRS Form 1099-Q: Payments from Qualified Education Programs