529 disbursement

6 replies
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I used my daughter's 529 plan to pay for her tuition in 2021. I have both a 1099-Q for her ($30K+), and a 1098-T ($50K+). My understanding is that this shouldn't increase her taxes, yet Turbotax increased both her State and Federal taxes by about $3k. Does this seem right?

Thanks.

TurboTax Home & Biz Windows

KrisD15

Alumni - Intuit

To clarify, are you entering the forms into YOUR program or Hers?

If yours, did you get an education credit?

Are you able to allocate the distribution to Room and Board rather than Tuition and Fees?

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royjordanAuthor

Level 2

Thank you for responding.

All of the information is being entered into her tax return. I have not tried to allocate since all of the expenses are charged directly by the school, the 529 disbursements have gone directly to the school, and the 529 disbursements are less than the school fees. Am I making an incorrect assumption?

Thanks again.