topic Turbotax 2025 - 529 distribution (1099Q) and 1098T form in Education

Turbotax 2025 - 529 distribution (1099Q) and 1098T form

hhp94001 — Mon, 23 Feb 2026 19:25:22 GMT

Please help with my questions below:

My son (who I claimed as a dependent) has received his 1099Q (25K, under his name from 529 distributions paying his college directly) and 1098T (25K, also under his name).

I have received my own 1099Q for $2K (from 529 distribution paying for his laptop and books).

How should I enter my 1099Q for $2K in TT so that it is tax free? I am also not qualified for the American Opportunity Credit due to my income threshold. But I would like to pay no tax for the $2K above since it is for school expenses.

I called TT this morning but did not get a clear answer. I plan to have my son filing his own tax. The recommendations from TT is for me to:

1) Include my 1099Q in my tax return

2) Include my son's 1098T in my tax return (not his 1099Q, only his 1098T).

If I do this, when my son files his own tax, should he include his 1099Q of 25K? but NOT including his 1098T because I already included his form in my tax?

Please help with my questions above. thanks

HHP

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

Hal_Al — Mon, 23 Feb 2026 20:46:53 GMT

Don't enter anything on either tax return.

The 1099-Q (and 1098-T) 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). In addition to that, the 1099-Q section of TurboTax is currently broke and won't be fixed until Feb 27.

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."

If you were eligible for the tuition credit, the answer would be a little different. See

https://ttlc.intuit.com/community/college-education/discussion/where-do-i-enter-college-room-and-board-expenses-that-were-paid-for-by-a-529-disbursement/00/3782831

if interested.

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

hhp94001 — Tue, 24 Feb 2026 01:19:55 GMT

Thank you for your feedback below !!

In my Turbotax, I already included my 1099Q and my son 1098T.

I tried to remove both of these forms under Wages & Income (1099Q) and Deduction (1098T), but it does not work. It looked like once you entered the info, TT remembered this and it stored the numbers in the "Forms" view.

Please advise if there is a way to completely remove these so that they do not show up any more under "Forms" view.

I would hate to restart the entire tax form from scratch to undo this.

thanks again!

HHP

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

Hal_Al — Tue, 24 Feb 2026 02:05:58 GMT

Delete form instructions https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-forms/view-delete-forms-turbotax-online/L7SZhwCHv_US_en_US

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

hhp94001 — Wed, 25 Feb 2026 02:00:09 GMT

Thank you for the instructions link below, but I am not able to follow the direction.

here is the instructions:

Open or continue your return.
On Tax Home, select Start, Continue, or Pick up where you left off to enter your return.
In the left menu, select Tax Tools and then Tools.
In the pop-up window Tool Center, choose Delete a form.
Select Delete next to the form, schedule, and worksheet in the list and follow the instructions.

I do not have Tax Tools and Delete a form function.

Is there another way to do this for my 2025 Turbotax Deluxe? thanks!

HHP

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

AmyC — Fri, 27 Feb 2026 20:05:35 GMT

Yes, you can delete forms.

If you are using the desktop, switch over to Forms mode. Locate the forms from the left, select delete. See How do I delete a tax form in TurboTax Desktop?
If you are online, look at the menu on the left side and select tax tools, then tools. See How do I view and delete forms in TurboTax Online?

@hhp94001

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

hhp94001 — Sun, 15 Mar 2026 21:35:59 GMT

Hi Amy or Turbotax experts,

I am still very confused on the 1099Q and 1098T form based on my previous questions & answers on this thread.

My son is 18yrs old, full time student first yr in college. We still claim his as a dependent for our tax in 2025.

Based on my previous questions, I am no longer include any 1099Q and 1098T in MY tax filing.

But for my son's tax filing, we are using TT to file his tax for 2025. His income is 4.5K and he should get $6 refund. But when he enters 1099Q (for 529 distribution paying to school directly but sent to him under his name, $24,540), TT predicts he needs to pay almost $2K in tax.

When he enters 1098T amount of $24,820 with $2886 on box 5. TT reduces his tax payment from $2K to $215. One of the question TT asked was about if he uses his scholarship to pay for room and board, if he said YES, his tax payment increases from $215 to over $400.

In another screen, TT asked more info about Computer & books & room & board expenses. He entered a total amount of $2300 for these categories. This $2300 amount is the same amount reported on 1099Q under my name (instead of his name). However, it does not reduce his tax payment.

Please help with the following questions:

1) Why does my son have to pay any tax at all after he enters his 1099Q and 1098T forms?. The 1099Q under his name was paid directly to the school of an amount $24,540 (box 1 is $24,540, box 2 is $16,311, box 3 is $8,228). His 1098T form reported a slightly higher amount of $24,820 (box 5 is $2886.25). If all of the 1099Q is qualified education expenses, should he pay zero tax for this distribution that went directly to pay the school?

2) For my son to pay ZERO tax on his 529 distribution, we had to increase his 1098T form from $24,820 to $31,500. For this setting, TT predicts he would have a refund of $6 that matches his original refund amount before he enters any education expenses. What are the relationships between 1099Q form and 1098T form and how does TT calculate tax amount based on my son's example?

3) My son's 1098T box 1 amount of $24,820 is currently including room and board for 2025. Starting Fall of 2026, my son will need to stay off campus as a full time student due to the college's limited housing. We plan to use 529 distribution to pay for his off-campus expenses (apartment rental, food, internet etc). I expect his 2026 1098T form box 1 will be LOWER going forward since it will no longer include room & board. Based on what we observed for his 2025 tax right now, does this mean in 2026, he will have to pay even more tax on his 529 distribution reported his 1099Q form?

4) Within his 2025 1098T form, box 5 is for scholarship with an amount $2886. When TT asks if any amount of scholarship was paid toward Room & board, he enters the entire $2886, and his tax payment went up from $215 to over $400. Why? Is this because room and board not considered as qualified education expenses?

5) When my son enters additional qualified education expenses such as computer, books (using the amount from 1099Q that is under my name), he did not get any reduction in his tax payment. Why?

Thank you for your help in advance answering these questions.

HHP

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

Nellinose — Sun, 15 Mar 2026 22:11:18 GMT

You are correct that the 529 room and board expenses are not being included as a proper deduction.

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

hhp94001 — Sun, 15 Mar 2026 23:17:43 GMT

Hi Turbotax experts,

From my questions in previous post,

When my son is using TT to file his tax, there is a question for 1099Q distributions:

Question: Who received the 1099-Q distributions?

The choices are: Taxpayer or Someone else

How should he answer this question? If the 1099Q was sent directly to his school, should he select "Someone else"? When he selected this option, the $215 tax he owed disappeared.

For next year 2026 tax, when he needs to stay off campus, should all 529 distributions for off campus expenses be sent directly to the Apartment rental company? So he can select "Someone else" and pay no tax when this 1099Q question comes up?

Please advise! This is still so confusing !!

HHP

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

hhp94001 — Sun, 15 Mar 2026 23:31:59 GMT

So we did another test on my son's TT.

We manually increased the 1099Q amount up to a much higher amount than the actual amount reported (+100K). As long as we picked the option "someone else" received the 1099Q distribution, there is ZERO tax owed by him.

I thought TT would compare 1099Q and 1098T numbers to figure out if there are any "Excess" distributions from 529, then calculate the appropriate tax due?

Turbotax experts - please help with these questions.. thanks!!

HHP

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

Hal_Al — Mon, 16 Mar 2026 12:58:02 GMT

Q. How should he answer this question? If the 1099Q was sent directly to his school, should he select "Someone else"?
A. No. Select Taxpayer. For 529 plans, there is an “owner” (usually the parent), and a “beneficiary” (usually the student dependent). The "recipient" of the distribution can be either the owner or the beneficiary depending on who the money was sent to. When the money goes directly from the Qualified Tuition Plan (QTP) to the school, the student beneficiary is the "recipient".

Q. For next year 2026 tax, when he needs to stay off campus, should all 529 distributions for off campus expenses be sent directly to the Apartment rental company?

A. No. That's not even an option. The 529 will only send the $ to the owner, beneficiary or the school.

Q. As long as we picked the option "someone else" received the 1099Q distribution, there is ZERO tax owed by him?

A. That's because TT now thinks "somebody else" was the recipient of the money (and the1099-Q) and has the responsibility for paying tax on any non qualified portion of the distribution.

Based on your description of your situation, neither you nor the student (nor anybody else) need to be entering the 1099-Q or 1098-T. There is nothing to report on your taxes. Furthermore, TurboTax is still broken in the 1099-Q and 1098-T sections. Delete them and the confusion will go away.

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

hhp94001 — Mon, 16 Mar 2026 01:23:10 GMT

Thank you for your feedback on my questions!

Do you know when this issue will be fixed for TurboTax?

I got nervous not including any 1099Q and 1098T forms. My rationale is: If people abuses the 529 distribution and asks for a much higher amount than what is allowed for the education, how would the IRS know to flag them for an audit? Don't they use 1099Q vs 1098T numbers to do a sanity check to see if the numbers are even close?

If I do not include any of these forms, I worry that it would trigger a higher risk for us getting audit.

Thanks again for your help with these questions. It would be great if TT will get fixed soon. Please let me know if you happen to know the timing.

HHP

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

Hal_Al — Mon, 16 Mar 2026 02:34:12 GMT

Q. If I do not include any of these forms, I worry that it would trigger a higher risk for us getting audit.

A. No, that can't happen. Even if you go thru all the TT hoops, hen 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. Nothing about all your entries is sent to the IRS.

I had the same concern, years ago. I forced TT to make a $0 taxable amount entry. I got "audited" anyway. It was easily explained away (I sent em the schools billing statements with a cover letter). Years ago, many users reported similar experiences with the same results. The IRS accepted their explanation. I have not seen any reports, in this form, about 1099-Q audits in several years.

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

Nellinose — Mon, 16 Mar 2026 03:24:00 GMT

I think you need to do some research on 529 distributions. Your son is the beneficiary of the 529. All the money goes to him. There is no someone else. Also, if the money is spent on tuition or room and board, he doesn't have to report the distribution. You making this more confusing for yourself.

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

Nellinose — Mon, 16 Mar 2026 03:25:01 GMT

If the 529 is your son's 529, then the money went to the taxpayer. When your son is the owner of the 529, he is both the taxpayer and beneficiary.

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

Nellinose — Mon, 16 Mar 2026 03:26:07 GMT

stop digging and do some research on the web about how IRS treats 529 distributions. Then turbotax would make sense. You are doing this backwards.

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

Nellinose — Mon, 16 Mar 2026 03:29:09 GMT

again do some research. the IRS selects who to audit on a random basis. You don't have to submit your 1099 or 1098. They know who has received distributions from the 529. That is all they need to know.

Also, why does your son have a 529 in his name? Usually the parent is the owner and the child is the beneficiary.

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

hhp94001 — Thu, 19 Mar 2026 19:06:23 GMT

I found one posting suggesting a work-around in TT to manually add books, computer & room and board to the student worksheet (from manisman1995 - see link below)

https://ttlc.intuit.com/community/retirement/discussion/how-to-enter-room-board-expenses-in-1098-t-1099-q-sections/00/3745114#:~:text=Level%203-,How%20to%20enter%20Room%20&%20Board%20expenses%20in%201098%2DT%20/,Level%203

When I tried to do this, I still have some issues. This is what I did.

1) I entered my 1099Q for 2.3K (from 529 distribution) into the wages/income misc section where the next screen allows you to enter 1099Q.

2) I switched to Deduction section entered more info about my son as the student (but put NO on the question - did he receive 1098T). This screen allowed me to enter books, computer & room and board expenses. But I still have to pay some tax for the 2.3K amount.

3) I switched to view the "forms" and reviewed the student worksheet under my son's name to see how the numbers were created. If I manually put the entire 2.3K on computer expenses, then I will pay NO tax. But if I have some amount on Room&board and Books, I have to pay some tax on. Am I doing something wrong? or this is one of the TT software bug that has not been fixed yet? I thought my entire 2.3K should be tax-free if they are qualified education expenses.

Please help with my questions above. thank you

HHP

Re: Turbotax 2025 - 529 distribution (1099Q) and 1098T form

Hal_Al — Wed, 18 Mar 2026 15:05:30 GMT

Q. I thought my entire 2.3K should be tax-free if they are qualified education expenses.

A. Yes.

Q. Please help with my questions above.

A. No. That's way to complicated with a desired goal that can be accomplished much more easily.

The interview is complicated, even when it isn't broken (and it's still broken) and it's easy to make mistakes. Avoid it if you can and you can, since you know none of it is taxable.

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 and nothing about it is sent to the IRS. You get the same results doing nothing or manipulating complicated workarounds.

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. It was easily explained and accepted by the IRS.