topic is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution? in Education

is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

CP1973 — Mon, 09 Feb 2026 20:22:40 GMT

where do you enter room and board expense?

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

Hal_Al — Mon, 09 Feb 2026 20:29:42 GMT

Yes, there is a software bug. You can't enter those room and board expenses yet. This is a known glitch in TurboTax (TT). They are working on it (no announced fix date). The 2025 education and 529 sections appear totally redesigned, from last year.

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

Bsch4477 — Mon, 09 Feb 2026 20:31:29 GMT

If all of your 529 distributions was used for qualified education expenses you don’t have to report your 1099-Q.

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

Hal_Al — Mon, 09 Feb 2026 21:06:41 GMT

The 1099-Q is only an informational document. The numbers on it are not required to be entered onto your (or your student's) tax return. The interview is complicated and it's easy to make mistakes. Avoid it if you can and you probably can.

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. 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 (you don’t need it). 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 also cannot count expenses that were paid by tax free scholarships.

References:

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."
IRS Pub 970 states: “Generally, distributions are tax free if they aren't more than the beneficiary's AQEE for the year. Don't report tax-free distributions (including qualifying rollovers) on your tax return”.
"IRS Publication 970, Tax Benefits for Education states: If the entire 1099-Q went to qualified expenses, room and board, tuition, etc; then, you do not need to enter the form."

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

JFW3 — Tue, 10 Feb 2026 06:51:22 GMT

The answer to not reporting the 1099-Q form isn't why I use TT. I want to enter the form, have TT ask the pertinent questions, and then have TT not include the amount in my taxable income. In prior years, we could enter room and board expenses, and the program offset them with the 1099-Q, and didn't report taxable income. There seem to be two bugs in the 1099-Q / 1098-T forms in 2025: 1. Inability to enter other qualified education expenses; and 2. Handling of 529 to Roth rollovers. Both of these incorrectly increase taxable income. Both can be programmed correctly, rather than requiring users to keep track of unreported forms.

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 5...

MaxA1 — Wed, 11 Feb 2026 03:19:50 GMT

There is a TurboTax update that is expected to fix the issue regarding qualified education expenses for 529 distributions that is set to take place Friday, February 13. Please check in after February 13th, if you are still experiencing issues.

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 5...

msedla — Thu, 12 Feb 2026 20:17:47 GMT

Can you send an update to this post once the bug has been corrected? Thank you.

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

campbellxvi — Sat, 14 Feb 2026 19:30:51 GMT

This education expenses / room & board issue prompted me to switch to TaxFreeUSA after 25+ years with TurboTax. An occasional glitch is acceptable; having to wait weeks for a resolution is not . . . and what a revelation the switch has been! First, there's no room & board issue. Moreover, TaxFreeUSA's interview process does a good job advising on taxable vs nontaxable 529 withdrawals vis-à-vis education credits. Overall, TaxFreeUSA's system is more streamlined and significantly cheaper ($17 vs $100+ for federal and state). You can also pull over most-to-all of your data by uploading last year's return. For me, it was a simple drag-and-drop of a PDF file, and I was ready to go. Finally, I was concerned about its ability to handle our somewhat complex tax situation (W-2s, pension, crypto, self-employed income / expenses, capital gains, 529s / 1098-Ts, education credits), but there were no problems. If you're tired of waiting, give it a shot.

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 5...

AnnetteB6 — Sun, 15 Feb 2026 19:53:04 GMT

This experience is currently being addressed by the development team. If further information is obtained such as an opportunity to register your email for updates, then it will be posted here.

@CP1973

@msedla

@campbellxvi

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

wibber17 — Thu, 26 Feb 2026 13:07:59 GMT

Hi,

After installing today’s update, Feb 26, on my desktop TurboTax 2025 version, the room and board option was now available to enter. Enter 1099-Q first, 1098-T second and that is where the missing Room and board option for College now displays in step-by-step entry.

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

strental — Tue, 17 Mar 2026 12:06:48 GMT

thanks, due to the software bug, it was trying to calculate taxes on qualified distributions although it was all spent for qualified distributions. Room and board appear as "not qualified" in help menu included with the form. I deleted to 1099Q Form as it was not recalculating taxes despite unchecking whether a 10Q was received.

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

wibber17 — Tue, 17 Mar 2026 13:08:06 GMT

The 1099-Q is entered on the tax form for person listed as beneficiary. 1099-T is than used to offset gains per 1099-Q, but if parent/guardian is claiming education credits on their taxes, you cannot double-dip. Room and Board is allowable to offset gains per 1099-Q and I’ve done this many years now for my kids in both cases; qualified for education credit and not qualifying for said credit. It is all a bit complicated though, but are many help resources out there posted or may be worth consulting a tax pro if your situation has more complexity.

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

strental — Tue, 17 Mar 2026 22:37:42 GMT

I believe we are on the same boat. We do not qualify for the credit. How do I say that I am not claiming taxes to get credit for room and board instead of answering no to the question “did you receive a form 1099-Q”?

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

wibber17 — Wed, 18 Mar 2026 00:50:03 GMT

Hi,

If you are not claiming the education credits for the beneficiary as dependent and all the 529 withdrawals were used for qualified expenses, you don’t have to enter 1099-Q. I suggest you read some of the other posts above that explain this fact. I elect to still enter them on the dependents taxes, but you do not have to if you are not doing education credits for the dependent beneficiary and all withdrawals are used for covered education expenses. Again, I’m not a tax accountant, so your situation could vary and always best to consult a tax expert or use the TurboTax service at least one year, if need help .

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

JFW3 — Wed, 18 Mar 2026 06:15:50 GMT

I don't ignore the other 1099 forms because they are not taxable. For example, I enter a non-taxable IRA rollover on a 1099-R, and the code on the form tells TurboTax it is not taxable. Why then should I ignore a 1099-Q because I've researched it and decided the 529 to Roth rollover was not taxable? Why can't TT ask for enough information to include or exclude it in taxable income? It's a matter of programming some interview questions, which is what TT does. I completely understand not to input a non-taxable 529 to Roth rollover 1099-Q into TT, as it's not reportable to the IRS. I think TT can and should program the logic and rationale behind that decision.

On the other issue, where the 1099-Q offsets valid educational expenses, both reported and not reported on a 1098-T, TT has corrected that and we enter both the 1099-Q and the 1098-T, plus additional valid expenses such as books and room and board -- and TT correctly offsets the amounts in reporting to the IRS. That information must be sent to the IRS because several years ago, my Dad received an inquiry from the IRS asking for supporting documentation for the qualified educational expenses. They tried to adjust his taxable income by the income portion of the 1099-Q withdrawal. Luckily we had all the receipts, sent them to the IRS and they closed the letter audit.

Re: is there a software bug that is not allowing me to enter room and board expense to offset a 529 plan qualified distribution?

Hal_Al — Wed, 18 Mar 2026 15:11:55 GMT

Q. Why then should I ignore a 1099-Q because I've researched it and decided the 529 to Roth rollover was not taxable?

A. Basically because the IRS says you can. A closely related example is the Savings bond exclusion. If you cash savings bonds and use the proceeds for education (including a rollover to a 529), the IRS makes you fill out form 8815 to show the calculations for the exclusion of interest. There is no similar form for a 529 distribution because the IRS knows most distributions are qualified. And it will not sent the TT worksheet to the IRS. Your tax filing reports nothing about the 1099-Q and the 529 distribution.

Q. That information must be sent to the IRS, right?

A. No, just the opposite. 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.

It's been many years since I've seen a post, in this forum, about the IRS questioning a 1099-Q. I got one myself, about 11 years ago. Like your case, it was easily explained and accepted by the IRS.