I rolled over a coverdell esa into a state run 529 plan. I received a 1099q for the distribution. Do I have to pay tax on this? If so how do I enter it into Turbo Tax?

[matt3072]

My son is 19 years old and is a full time college student. The 1099q is in his name and he has to file a tax return.

[IreneS]

Yes, you are required to report the 1099-Q.  The form is sent, not only to you, but to the IRS as well.   However, you do not have to pay tax on the distribution if it was rolled over into another qualified tuition plan (QTP).

To enter this information in TurboTax, please follow these steps:

1. Click on Federal Taxes > Deductions & Credits [In TT Home & Biz:  Personal > Deductions & Credits > I’ll choose what I work on]
2. Scroll down to the Education section.
3. Click on the Start/Revisit box next to ESA and 529 qualified tuition programs (Form 1099-Q). 
4. On the next screen, Education Plans, click Yes and then Continue.  
5. On the Form 1099-Q Information screen, enter the information from your form and click the Continue box.  [Screenshot #3]
6. If this was a direct trustee-to-trustee rollover, be sure to mark Box 4 on the 1099-Q entry screen. 
   
7. On  the Distribution Transfer screen, click the blue Yes box to indicate that the distribution was rolled over to another QTP.
8. Continue through the interview, entering the requested information.
   

[samtax501]

Similar situation, here.  The 1099Q shows my son's ssn.  My son is a high school senior that takes a couple of classes at the local community college because the high school does not offer any math classes that he has not taken.  The ESA (Son with me as authorized person/custodian) was rolled into an existing 529 (me owner, son is beneficiary).  Do I report the 1099Q on my return, or my son's return?

[msaaj]

I do not think Turbotax covers all the possible scenarios.  It covers the rollover case, but does not cover the case where I withdraw from a Coverdell and simply use the money to make a contribution to a 529 of the same beneficiary. That is not a rollover and therefore not subject to the rollover 60 day/1 within a year rules.  It is simply considered a qualified expense.  However, if you try to enter it as a qualified expense, Turbotax assumes the beneficiary is in college.  I have gotten around this by lying to Turbotax that it is a rollover and lying about the dates to satisfy to 1 year rule. Would love ofr someone from Turbotax to comment.