topic 1099-Q lists parent as recipient but was for education expenses not exceeding qualified expenses. When box is checked in TT for parent as recipient it calculates as income. Should dependent be checked as recipient? in Get your taxes done using TurboTax

1099-Q lists parent as recipient but was for education expenses not exceeding qualified expenses. When box is checked in TT for parent as recipient it calculates as income. Should dependent be checked as recipient?

tcb1986 — Sat, 08 Feb 2020 16:35:06 GMT

Re: 1099-Q lists parent as recipient but was for education expenses not exceeding qualified expen...

ColeenD3 — Sat, 08 Feb 2020 16:53:51 GMT

If you were the owner of the 529 or Coverdell, and your child is the beneficiary, then only the beneficiary reports the income.

Please see this LINK for a more detailed explanation.

Re: 1099-Q lists parent as recipient but was for education expenses not exceeding qualified expen...

tcb1986 — Fri, 21 Feb 2020 16:05:26 GMT

But the beneficiary is a dependent and I, the parent, was the recipient. Everything that I am reading is saying that it should not be taxed if it is under the qualified education expenses. But TT is calculating income tax when I am marked as the recipient. It appears that the calculations are not correct in my software as the QEE are over $11K and we took out only $2K.

Re: 1099-Q lists parent as recipient but was for education expenses not exceeding qualified expen...

KrisD15 — Sat, 22 Feb 2020 03:29:31 GMT

If you enter the 1098-T first, the program might allocated 10,000 expenses towards a credit,

Go back through the education interview until you get to the screen that show how much in expenses are being used for a credit, Change the number on the screen.

Please go back to the "Education" section. (Federal, Deductions & Credits, Scroll down to Education).

Get to the "Education Information" section (the last option on the "Here's Your Education Summary" screen).

Re-answer the interview questions until you get to the last screen. This screen should show how much of the education expenses are being allocated to a credit.

If you are eligible for the American Opportunity Tax Credit (usually the more valuable credit), the credit maxes out at 4,000 expenses, so you wouldn't want to allocate more than that.

If you are taking the Lifetime Learner's Credit, the credit maxes out with 10,000 expenses.

If you want all the expenses to be applied to the scholarships/grants/1099-Q distribution, change the amount to 0.

Re: 1099-Q lists parent as recipient but was for education expenses not exceeding qualified expen...

tcb1986 — Sat, 22 Feb 2020 14:11:57 GMT

Thank you for your assistance! For those of you reading this post looking for this answer, for some reason it did not take me through some of the screens when I did the step-by-step. It may be due to inputting the info as it came in. I am using the business edition and was not able to get to the summary in the way described but did when I revisited the update on expenses and scholarships. When it got to the end, it properly calculated that there were more expenses than the distribution.

I do have one last question - the information from the 1098-T was entered exactly as it came from the university. I did not have to add expenses for books and other items as there was enough to cover for the AOC. Are you saying we should reduce the number to $4,000?