topic Re: You should respond that you received a 1099 Q and whether... in Education

1099-Q for 529 Indirect Rollover

mike51 — Thu, 06 Jun 2019 08:50:04 GMT

I performed an indirect rollover for my child's 529 account. The funds were deposited into the other 529 account within the 60 day limit.

I received the 1099-Q showing the distribution, but there is no tax form to show the funds were re-deposited within the 60 day limit.

How do I enter this in Turbo Tax and not get taxed on the the funds as an unqualified distribution?

You should respond that you received a 1099 Q and whether...

MichaelDC — Thu, 06 Jun 2019 08:50:07 GMT

You should respond that you received a 1099 Q and whether or not you were the beneficiary. Indicate that no one's education expenses were paid by this distribution.

On the Distribution Transfer screen, indicate Yes that you rolled over or transferred the distribution. On the Rollover screen indicate that the ENTIRE amount of this distribution to another qualified tuition program

Even if the 1099-Q notes a distribution code (1), you will have the opportunity to indicate the indirect rollover and avoid tax. These screens are immediately after you type in the 1099-Q exactly as it appears.

Please feel free to post any additional details or questions in the comment section.

Re: You should respond that you received a 1099 Q and whether...

Anonymous — Sun, 05 Feb 2023 00:54:00 GMT

I rolled over direct from one plan to another. When I entered the 1099Q, Turbotax added a large amount to Fed and state tax due. After I edited the 1099-Q to check, Turbotax stated that only one rollover was permitted. There was only one rollover, so it's unclear why that message came through. This is with Turbotax 2022 Deluxe on a PC (not online version).

I edited the form and for some reason Turbotax had not checked that the full amount was rolled over. I got no question in interview mode about how much of the distribution was rolled over though I had stated that the 1099-Q box for direct rollover was checked. Once I checked the box in form mode, the tax due went away.

Hope this helps anyone else who may run into this problem.