1099-Q

Forum|Forum|4 years ago
February 28, 2022
1 reply
1 view

I received a 1099-Q for college expenses. Am I supposed to enter in both the 529(A) and 529(C) figures in TurboTax?

Cynthiad66

Level 14

@MarkWiz72 - No. Enter the form 1099-Q based on the plan you have Determine where to enter by reviewing your 529 plan.

What is the difference between 529 and 529A?

What is a 529A plan? Similar to a 529 college savings plan, a 529A plan allows you to save for a specific purpose. Instead of strictly using the money for education-related expenses — as would be required with a 529 college savings plan — you can use the money for disability-related expenses

What is a 529 C?

A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. 529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code

Form 1099-Q reports distributions and benefits from Coverdell education savings accounts and 529 plans. It's reported on the tax return of the person whose Social Security number is on the form.

Here's how to enter your 1099-Q in TurboTax:

Use this link for more information: Information on 529 plan

Open or continue your return.
Select Federal and then Deductions & Credits.
Scroll down to the Education section under All tax breaks.
Select, Show more and select Start or Revisit next to ESA and 529 qualified tuition programs (Form 1099-Q).
Follow the screens to enter your info.

Use this link for additional information: Qualified Tuition Plans - IRS

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MarkWiz72Author

Level 3

ok thank you. I noticed my return plummeted after entering my 1099-Q. am I being taxed that much on my distribution even though it was used for a qualified education expense?

KrisD15

Level 15

So I am the student's (my daughter) father; does what you said below still hold true? I am the recipient of the 529, but the distribution goes for her education. So you're saying on my returns, I needn't report the 1099-Q, thereby not paying taxes on the distribution? I wouldn't say the qualifying expense was more than the distribution; we just pulled out what was needed.

Short answer, YES

If you used a 529 saving plan to pay education expenses, and the distribution is equal to expenses, you needn't enter the 1099-Q nor the 1098-T.

Remember that a distribution can be used tax-free to pay for Room and Board as well as Tuition, books, supplies, and fees.

Tuition, books, supplies, and fees can be used towards an education credit.

The person claiming the student can allocate part of a distribution as taxable income for the student if it frees up expenses for a credit. The credit is often worth more than the tax on the distribution or scholarship.

OR if the distribution can be allocated to room and board, that would be tax-free and might free-up expenses to use for a credit.

There are many options available, but you can always just pass-up trying to get the credit and leave off the forms if there is no Tax liability involved.

IRS PUB 970

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