Tuition Payments

[vanner]

I paid all of the tuition for my children in 2019.  I also withdrew from their 529 plans to pay the tuition.  I received 1098-Q's for these withdrawals and was able to enter them into TurboTax; however, I am not able to enter any tuition that I paid (I get a notification that "You Can't Claim Tuition and Other Fees" because my MAGI exceeds the maximum limit).    I am given the opportunity to enter education expenses, but the Tuition and enrollment fees are $0, and I am unable to change that.  As a result, my tax due has increased by a massive amount, since the program appears to be calculating tax due on the 529 withdrawals which it assumes were not used for educational purposes.  How am I able to enter the tuition I paid and is listed on the 1098-T's?

[NCperson]

Sounds like you MAGI exceeds $180,000 in which case you are ineligible for AOTC.

do your qualified expenses exceed the 1099Q Box 1?  

if so, then you don't need to enter the 1099Q at all. 

And I assume on the 1098-T that Box 1 exceeds Box 5. 

[vanner]

Thanks for the quick reply!  Yes, my MAGI exceeds $180,000.  My qualified expenses exceed the values in the 1099-Q's Box 1, so I guess I can remove the 1099-Q''s from my return.  I'm confused about Box 1 exceeding Box 5, since Box 5 is the plan type (State plan in my case).  However, the value in Box 1 exceeds the values in Boxes 2 and 3.

Since I cannot claim tuition, should I remove the 1099-T's as well, and have my children enter them on their returns?  They all have to file tax returns this year.

[NCperson]

note that my ask and assumption was about form 1098-T and not 1099Q.... please read what i posted again.

the 1098-T MUST go on YOUR return if your children are claimed as your dependents.  in your case it doesn't matter whether you post the 1098-T or not as there is no tax benefit.  

[vanner]

Oops!  I reread your original email (my bad - sorry about that).  The value of tuition payments (Box 1) does exceed the scholarships (Box 5) on the 1098-T.

If I do not claim the children as dependents on my return, can they put the 1098-T on their return?  Their MAGI is well below the $90,000/$65,000 limit for the American Opportunity credit or Lifetime Learning credit, and I don't know if they would then qualify for those.

[NCperson]

you can't do that - the question the students have to answer is CAN some one else claim them, not IF someone else claimed them.