Why is TT taxing qualified 529 distributions?

RichInPitt · Jan 16, 2020 2:15:34 PM

I withdrew an amount from my daughter's 529 in the amount of her expenses for the year, all in the same calendar year. TT is taxing me on a portion of it. The TT Form 1099Q has two columns for Computation of Taxable Distribution - one for Regular Tax and one for 10% Additional Tax. The 10% Additional Tax column has Line 1, distribution, and Line 2b/c Qualified Higher Education Expenses, as the same, correct number, so no 10% excess tax. But the Regular Tax Column has a number $10,000 lower for the 2b/c Qualified Higher Education Expenses amount, so line 3, Excess Contribution, is 10,000. It then calculates the percentage that is earnings, etc., and comes up with $4,000+ that is taxable. Why is 10,000 of expenses excluded? I checked the 1099Q and 1099T forms many times, and they all have the same numbers that match. I saw this from last year - <A href="https://ttlc.intuit.com/community/retirement/discussion/withdrew-money-for-son-s-undergrad-ed-expenses-ed-expenses-are-in-excess-of-the-amount-removed-ttax/00/190070" target="_blank">https://ttlc.intuit.com/community/retirement/discussion/withdrew-money-for-son-s-undergrad-ed-expenses-ed-expenses-are-in-excess-of-the-amount-removed-ttax/00/190070</A> - but I see nowhere to define any amount to be used for a tax credit (for which we don't qualify). The path suggested in that answer doesn't exist in TT2019. I also found a similar problem "solved" last year - <A href="https://ttlc.intuit.com/community/college-education/discussion/why-would-529-earnings-be-taxed-if-qualified-tuition-greater-than-withdrawal-amounts/00/280688#M7556" target="_blank">https://ttlc.intuit.com/community/college-education/discussion/why-would-529-earnings-be-taxed-if-qualified-tuition-greater-than-withdrawal-amounts/00/280688#M7556</A> but the URL to what appear to be an Intuit support explanation/fix is no longer valid ("TurboTax Support has moved")