topic Re: 529 Plan Distributions in Education

529 Plan Distributions

hovdawg — Sat, 18 Apr 2020 20:42:57 GMT

I took distributions from my sons 529 account to pay for his tuition in 2019. My total distribution was less than the total tuition charges. I'm entering the info from the 1098-Q form which was sent in my name, the 1099-T came to my son. I used the distributions for qualified expenses. It's not letting me enter education expenses because it's saying our income (filing jointly) is too high. I didn't think there were income limits on 529 plans if used for qualified education expenses (tuition).

Re: 529 Plan Distributions

Hal_Al — Sat, 18 Apr 2020 21:48:38 GMT

Don't enter the 1099-Q, at all. it is only an informational document and is not required to be reported on your tax return.

On form 1099-Q, instructions to the recipient reads: "Nontaxable distributions from CESAs and QTPs are not required to be reported on your income tax return. You must determine the taxability of any distribution."

If your student-beneficiary has sufficient educational expenses, including room & board to cover the distribution. 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. But, your own records are adequate for that.

Re: 529 Plan Distributions

Carl — Sat, 18 Apr 2020 23:41:24 GMT

The 1099-Q is entered on the tax return of the person whose SSN is shown as the beneficiary recipient on that form, *IF* it is actually required to be reported per the previous guidance.

Basically, since you're filing joint if your household income is above $160,000 then don't bother claiming/reporting anything for education. You don't qualify for any education deductions or credits.