1099-Q was issued as Parent was the recipient but all distributions went directly to my daughter

[Unwired17]

We have a 529 account with Fidelity for my daughter's education expenses. She files her own taxes and is not listed as a dependent on our return.

All checks from the 529 are written directly to my daughter, yet she did not receive a 1099-Q. I as the owner of the account received it instead and the box "recipient is not the designated beneficiary" is checked. But 100% of the distributions went directly to my daughter.

Whose tax return is this 1099-Q reported? If it is on mine then why would I report it as a distribution that I never received. If it is on hers, how do I reconcile that she never received the 1099-Q? She did receive a 1098-T.

I am so confused by this.

Thanks for your help

[SharonD007 · Accepted solution]

Form 1099-Q only needs to be reported on the tax return of the person whose SSN is on the form if the withdrawal is more than the tuition paid in Box 1 of the 1098-T plus other adjusted qualified educational expenses. In that case, the earnings on the excess distribution would be taxable income.

First, determine if the Form 1099-Q needs to be reported on the tax return by comparing the withdrawal with the tuition paid on the 1098-T added to other qualified educational expenses. To find out what are qualified educational expenses, please review the Guide to Tax Form 1098-T: Tuition Statement. Please review the TurboTax articles Guide to IRS Form 1099-Q: Payments from Qualified Education Programs and What is IRS Form 1099-Q? for further details.

Secondly, enter the 1099-Q into TurboTax only if  if the withdrawal exceeds the educational expenses on your tax return by following the directions below.

If you are using TurboTax Online:

1. Launch TurboTax
2. In the search box type: 1099-Q and select the Jump to link
3. Follow the screens to enter your information.

If you are using TurboTax CD/Download:

1. Launch TurboTax
2. Select Federal Taxes and then select Deductions & Credits
3. Select I'll choose what I work on
4. Scroll down to Education, select Start or Update next to ESA and 529 qualified tuition programs (Form 1099-Q)
5. Follow the screens to enter your information.

EDIT 3/26/23|6:14PM

@Unwired17