topic Has to be TT Issue in Education

I cannot continue my Federal Taxes (QTP)

Stahlwittchen — Wed, 22 Jan 2020 07:15:11 GMT

So I am a Grad Student with a 529 College Savings Account, and I already entered in my 1099Q form under my income. After I finished up with my W-2s and my credits, I am approached by a page stating: "Other Income Statement: Qualified tuition program distributions - Taxpayer - You can't file just yet due to a recent law passed by Congress". And it's telling me to review my distributions which I had already entered, and I checked that they are correct. What Law?! Why can't I submit my taxes now, when I already have all of my documents ready?

Is anyone else experiencing this, because I would love an explanation. Also what did Congress even do?

Re: I cannot continue my Federal Taxes (QTP)

Hal_Al — Wed, 22 Jan 2020 13:09:01 GMT

"entered in my 1099Q form under my income"

The 1099-Q should be entered at Deductions and credits/ education, not in the income section.

The SECURE act, signed 12-20-19 allows 529 plan money to be used for student loan payments. Even though you may not be affected, the program is. https://www.savingforcollege.com/article/new-law-allows-529-plans-to-repay-student-loans

Alternatively; you can just not report the 1099-Q, at all, if your student-beneficiary has sufficient educational expenses, including room & board (even if he lives at home) to cover the distribution. You would still have to do the math to see if there were enough expenses left over for you to claim the tuition credit. You cannot double dip! When the box 1 amount on form 1099-Q is fully covered by expenses, TurboTax will enter nothing about the 1099-Q on the actual tax forms. But, it will prepare a 1099-Q worksheet for your records, in case of an IRS inquiry.

Re: I cannot continue my Federal Taxes (QTP)

Stahlwittchen — Wed, 22 Jan 2020 17:41:32 GMT

Hi,

Thank you for your information. I took my 1099Q info out from income and put it under Deductions. However, TurboTax is not allowing me to enter in cent amounts for each of the three boxes, same as when I tried it before. So I rounded (again), and I am still being hit by the QTP page under the Federal Review.

I don't want NOT to report it, as I would rather not have any issues with the IRS. Box 1 ends in (.56 cents), Box 2 ends in (.29 cents), and Box 3 ends in (.27 cents). Since TurboTax isn't allowing me to enter in the most accurate amounts, could this be the reason why I am still being hit at the end of my Federal Review?

Re: I cannot continue my Federal Taxes (QTP)

Hal_Al — Wed, 22 Jan 2020 20:01:00 GMT

when you use rounding you have to be sure the box 2 and box 3 amounts add up to the box 1 amount. So, in your case round 29 cents (box 2) up. Round box 2 (rather than box 3) since box 2 is earnings (the potentially taxable portion).

Re: I cannot continue my Federal Taxes (QTP)

jnh — Fri, 24 Jan 2020 02:40:30 GMT

I have a similar issue but not the same:

During the review process I get the following screen message:

"Other Income Statement: Qualified tuition program distributions - Spouse - You can't file just yet due to a recent law passed by congress. This means a better outcome for taxpayers like you who have taxable QTP distributions. We can keep working on your tax return and we'll let you know when we can help you finish up you taxes.

That's nice but the 1099-Q was the last thing I needed to file my taxes so it is the only thing holding it up. TurboTax - please issue this change ASAP; "well let you know" is not precise enough. ty

Re: I cannot continue my Federal Taxes (QTP)

Hal_Al — Fri, 24 Jan 2020 02:42:51 GMT

It's an IRS hold up not TurboTax.

Re: I cannot continue my Federal Taxes (QTP)

Stahlwittchen — Fri, 24 Jan 2020 05:03:28 GMT

It would just be nice for them to state when I will be able to complete my taxes.

Re: I cannot continue my Federal Taxes (QTP)

photobike — Sat, 25 Jan 2020 20:55:00 GMT

Does anyone know when the IRS is going to allow for returns to be filed that have QTP?

Re: I cannot continue my Federal Taxes (QTP)

Hal_Al — Sat, 25 Jan 2020 21:18:56 GMT

@photobike - you're tagging on to an existing thread. That limits you to 3 possible responders.

Post a new question.

It's probably low priority with the IRS. The IRS has not had a form for QTP, in the past. They may be taking this opportunity to finally develop one.

Re: I cannot continue my Federal Taxes (QTP)

dabasa53 — Mon, 27 Jan 2020 14:21:45 GMT

In lieu of e-file, Can I just print off and file a paper return instead of waiting for IRS to develop a new form. My distribution was not used to pay off a student loan and I am awaiting a large refund.

Re: I cannot continue my Federal Taxes (QTP)

ColeenD3 — Mon, 27 Jan 2020 15:43:01 GMT

@dabasa53

Since there are some changes that require an update of the information, printing and mailing you return sidesteps a possible issue. You may need to amend if your return is discovered to be incomplete.

Qualified tuition program (QTP).

For distributions made from qualified tuition programs (QTPs) after 2018, qualified higher education expenses may include: • Certain expenses required for a designated beneficiary's participation in certain apprenticeship programs. • No more than $10,000 paid as principal or interest on a qualified student loan of the designated beneficiary or the designated beneficiary's sibling.

2019 QTP

Re: I cannot continue my Federal Taxes (QTP)

Stahlwittchen — Mon, 27 Jan 2020 17:15:41 GMT

@ColeenD3

I have read that form, but nowhere does it say how long it will be until I can complete my taxes.
Neither of those situations listed under QTP in your post apply to me, I am merely just a Grad Student using a 529 to pay for school.

Does everyone on here that gets a QTP at the end of their taxes going to have to wait to file their taxes too? I am also waiting on a decent return and it would just me nice to know when taxes can be submitted, or if this is going to take a long time.

Re: I cannot continue my Federal Taxes (QTP)

SusanY1 — Mon, 27 Jan 2020 18:59:11 GMT

An estimate cannot be given, because the IRS has not provided one.

Unless you have taken a taxable distribution from your Qualified Tuition Plan (one in excess of your expenses or one that is not qualified) the IRS does not require you to report it on your tax return.

If you do not have a tax due as a result of your distribution, you will not have any issue with the IRS if you simply remove the 1099-Q from your tax return and file.

@Stahlwittchen

Re: I cannot continue my Federal Taxes (QTP)

photobike — Mon, 27 Jan 2020 20:42:52 GMT

I called and spoke with an IRS agent and they said that they are not aware of any QTP issues that would hold up returns getting filed electronically. They suggested this may be a tax software issue.

Is there something going on the TurboTax side of things?

Re: I cannot continue my Federal Taxes (QTP)

AmyC — Mon, 27 Jan 2020 20:57:19 GMT

The IRS does post drafts as they work on them here. The drafts mean absolutely nothing to taxpayers, only developers. Once the form is approved, then Turbo Tax can implement and test and release it for you all to use. Here is the actual Federal form availability.

Re: I cannot continue my Federal Taxes (QTP)

dabasa53 — Mon, 27 Jan 2020 21:37:47 GMT

I don't see any form on that list that seems to relate to this QTP issue....can you point it out? Based on Photobike's post, it does not appear the IRS is even working on this. Can you confirm this is not just an issue with the Turbo Tax software?

Re: I cannot continue my Federal Taxes (QTP)

SusanY1 — Mon, 27 Jan 2020 22:20:47 GMT

If the expenses were not taxable and were used only for qualifying expenses - that is for tuition, fees, room, board, books, and supplies, you are not required to report the information provided on the 1099-Q. The IRS only requires you to report the information when the income is taxable.

You can learn more about this form here: Guide to IRS form 1099-Q.

Some taxpayers, such as those who took taxable distributions and also made student loan payments may benefit from waiting to file their tax returns due to recent changes in the tax law. The IRS has not yet issued guidance on many matters related to the changes, therefore taxpayers with 1099-Q distributions are advised to wait at this time.

Re: I cannot continue my Federal Taxes (QTP)

dabasa53 — Mon, 27 Jan 2020 22:40:39 GMT

@SusanY1

My QTP distribution was not used for Qualified expenses and was not used to pay Student loans (and no other exception applies). As such, further IRS guidance on 1099 Q will have no impact on my return. Nevertheless, the taxable gain from my distribution was rather small and a significant refund is being delayed due to the inability to file this return through Turbo Tax. This is extremely frustrating. I am having difficulty understanding why Turbo Tax will not allow filing of the return. I am wondering if the return can be filed with other tax software and this is just a Turbo Tax issue.

Re: I cannot continue my Federal Taxes (QTP)

dan_ve_sf — Mon, 27 Jan 2020 22:47:44 GMT

any idea if there's a way to sign up for updates/notifications when this is resolved?

Re: I cannot continue my Federal Taxes (QTP)

beaner — Mon, 27 Jan 2020 22:49:21 GMT

I am also having the same issue with this delay due to QTP and the Congress holdup. . . no reason to be held up because it's such a low amount, but I cannot "skip" and file anyway with TurboTax. And I just received an email from TurboTax saying I'm all set to submit. . . but it still won't let me!

TurboTax: should we print out the forms and submit via snail mail or will this issue be resolved soon? A time estimate would be helpful so we can decide how to proceed