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Level 2
posted Mar 13, 2024 1:57:39 PM

1099-Q Form

A 1099-Q form appears to show up under income and a deduction.  Is that supposed to be the case.  Are you getting taxed on what you earned in a 529 plan even though it is a qualified distribution for taxes?

 

0 4 1306
4 Replies
Expert Alumni
Mar 13, 2024 2:51:54 PM

You don't need to enter the 1099-Q into your tax return provided you have tuition expenses that meet or exceed the withdrawals.

 

@ds11ct 

Level 2
Mar 13, 2024 5:22:27 PM

Thank you for the response.  What are you supposed to do when Turbo tax asks you if you have a 1099-q form?  
My thought is you have to say yes and it taxes you on your earnings from your 529 account.  Not the basis contributed amount.

Trying to figure this out as it affects what I owe

Expert Alumni
Mar 13, 2024 5:35:30 PM

@RobertB4444 is correct. If the distribution doesn't exceed the amount of the student's qualifying expenses, then you don't have to report any of the distribution as income on your tax return. If you already entered the Form 1099-Q but your qualified expenses paid in the tax year exceed the amount of the distribution, you can delete the Form 1099-Q entry. If the distribution exceeds these expenses, then you must report the earnings on the excess as "other income" on your tax return.

 

See this TurboTax tips article for more information.

Level 2
Mar 13, 2024 5:48:35 PM

I already filed so I will need to fill out a 1040x form to correct this.  That would save me money