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1099-Q Question on message that "Student Beneficiary must report $ of taxable income from this distribution"

I entered multiple 1099-Q entries for forms that my college children had received. 2 of them said that I didn't need to report anything. But one said that "the student beneficiary must report $4,122 of taxable income from this distribution."

I am filling out an individual tax return for that child. So how/where do I enter that amount in his taxes?  The 1099-Q actually has box 2 earnings of 7192.17. So I know that I must not be just entering the 1099-Q in his tax return.  Somewhere I must be entering just the 4,122 amount. 

 

Thanks for any help.

Darol

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5 Replies
KrisD15
Expert Alumni

1099-Q Question on message that "Student Beneficiary must report $ of taxable income from this distribution"

Enter the 1099-Q and then enter that it was used for expenses, lets say Room and Board, since that's easy. 

Enter the amount USED for Room and Board so that it leaves 4,122 income. 

For example:

If the distribution was 10,000 enter the 1099-Q and 5878 as Room and Board expense so the student is taxed on 4,122.

 

It does not matter in this example if the student did pay Room and Board, it is just to have the program make the proper calculation. 

 

This will be "Unearned" income for the student. 

If the student also received scholarships, it MIGHT be better to have them claim scholarship income in lieu of Distribution. 

 

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1099-Q Question on message that "Student Beneficiary must report $ of taxable income from this distribution"

Thank you, Kris.

First of all, I think you're saying to enter the information you described on my son's tax return, right?

 

Secondly, the 1099-Q entry doesn't ask anything about education (like Room and Board). I think that only shows up in the 1098-T form area for the education credits. But I've entered the 1098-T in my form.  So I guess in this instance, I should enter the 1098-Q and 1098-T in his and make it so that there is 4122 of taxable income for him?

KrisD15
Expert Alumni

1099-Q Question on message that "Student Beneficiary must report $ of taxable income from this distribution"

Yes, 

I tested a return and was asked for expenses directly after entering the 1099-Q without going to the 1098-T screens, but the Education section is tricky. 

Yes, enter so that the program taxes that 4122 of income and has the Earnings to Contribution ratio so that the tax can be computed properly. 

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1099-Q Question on message that "Student Beneficiary must report $ of taxable income from this distribution"

Got it - thanks very much - I do see it now.

 

And last question - can I do this in my son's tax return?  I wanted to make sure of which return I should be doing this (mine or his)? Thanks. 

KrisD15
Expert Alumni

1099-Q Question on message that "Student Beneficiary must report $ of taxable income from this distribution"

The student's return for the taxable income entry. 

 

From your post, I assume you already used the 1099-Q's and 1098-T's on your return to see if you could get any Education Credits. 

 

The tax on distributions are the responsibility of the person who was issued the 1099-Q. 

If the 1099-Q is issued to the student, they claim the income. 

If the 1099-Q is issued to the Account Owner, they claim the income. 

 

 

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