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kaiotes123
Returning Member

Turbotax is not calculating the 10% non qualified 529 withdrawal penalty correctly. It is taxed at my w2 rate. how do i fix this? I entered the 1099-q data.

 
2 Replies
annajoe803
Level 6

Turbotax is not calculating the 10% non qualified 529 withdrawal penalty correctly. It is taxed at my w2 rate. how do i fix this? I entered the 1099-q data.

A nonqualified 529 plan withdrawal is subject to your regular tax rate (what I assume you mean by your W2 rate) PLUS a 10% penalty.  It is not taxed at a flat 10%.  It sounds like TurboTax is calculating correctly but that perhaps you weren't prepared for the full tax consequence of the withdrawal. 

 

kaiotes123
Returning Member

Turbotax is not calculating the 10% non qualified 529 withdrawal penalty correctly. It is taxed at my w2 rate. how do i fix this? I entered the 1099-q data.

thank you for the reply. yes i misunderstood it.

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