topic Re: 1099-Q Data in Get your taxes done using TurboTax

1099-Q Data

bobmcleod21 — Sun, 08 Feb 2026 21:08:14 GMT

Turbotax 2025 does not handle the entry of 1099-Q data properly. Funds that are used for approved educational expenses in accordance with the 529 program should not show up as taxable income on Form 1040, line 8; yet they do!

Re: 1099-Q Data

DavidD66 — Mon, 09 Feb 2026 01:16:29 GMT

Cam you clarify your situation? Is the beneficiary of the 529 Plan you (or your spouse), a dependent on your tax return, or a non-dependent?

Re: 1099-Q Data

bobmcleod21 — Wed, 11 Feb 2026 02:14:53 GMT

Beneficiaries of 529 funds were grandchildren (4). They were not dependents. All proceeds were used for approved education expenses.

thank you,

[PII Removed]

Re: 1099-Q Data

SharonD007 — Mon, 09 Feb 2026 03:04:36 GMT

If all the distribution exceeded the educational expenses, the 1099-Q doesn't need to be reported on your tax return.

The 529 distribution (reported on Form 1099-Q) only needs to be reported on the tax return of the person whose SSN is on the form if the withdrawal is more than the tuition paid in Box 1 of the 1098-T plus other adjusted qualified educational expenses. In that case, the earnings on the excess distribution would be taxable income.

First, determine if the Form 1099-Q needs to be reported on the tax return by comparing the withdrawal with the tuition paid on the 1098-T added to other qualified educational expenses. To find out what are qualified educational expenses, review the IRS Tax benefits for education: Information center. Refer to the TurboTax articles Guide to IRS Form 1099-Q: Payments from Qualified Education Programs and What is IRS Form 1099-Q? for further details.

Secondly, enter the 1099-Q if the withdrawal exceeds the educational expenses by following the directions in the TurboTax Help article Where do I enter a 1099-Q?

Re: 1099-Q Data

bobmcleod21 — Wed, 11 Feb 2026 16:57:36 GMT

I understand the tax law regarding the 529 accounts for educational expenses. I don’t believe that the current version of TurboTax handles the data from the 1099-Q accurately.

Re: 1099-Q Data

AmyC — Wed, 11 Feb 2026 22:38:32 GMT

If a 1099-Q is entered, the program is looking to tax the income. It does not expect extra forms to be entered without a reason. Since the 1099-Q was not income, it should not be entered. Tuck the 1099-Q into your tax folder. IRS Publication 970, Tax Benefits for Education states that nontaxable distributions should not be entered.

Re: 1099-Q Data

BSEA — Sun, 12 Apr 2026 08:46:26 GMT

OP has a point here. As recently as last year, when entering a 1099-Q, TurboTax would ask if all of the distribution was spent on qualified educational expenses. If the answer was Yes then none of the amount was added to taxable income. That doesn't happen in 2025, and I just spent an hour trying to debug what was happening before finding this thread and deleting the 1099-Q's from my return to fix it.

I'd recommend updating the process to again ask the user if the distribution was used for qualified educational expenses. If so, then either tell the user to delete the 1099-Q, or properly record the distribution as fully qualified so it doesn't increase taxable income. It's a terrible user experience right now.