Solved: 529 Distribution to match 2023 scholarship went thru in January 2, 2024

nmepxe · Jan 2, 2024 8:26:08 AM

We initiated a withdrawal to match the scholarship money our son got for 2023 on Dec 28, 2023. It was processed on January 2, 2024. We requested the money to be paid to him. Can he declare those as income in 2023 to avail of AOTC? If we can't use it in 2023, can we withdraw the same amount in 2024 and use scholarships received in 2023 and 2024 to waive the 10% penalty? Our question is can we waive the 10% tax penalty on the January 2024 disbursement meant for the 2023 scholarship received, when we file taxes in 2024 (which would allow us to withdraw the 2024 scholarship received penalty-free as well)?

529 Distribution to match 2023 scholarship went thru in January 2, 2024

It sounds like there is an answer wrong somewhere throwing off the program. View all of your forms to determine where the issue is coming from and then return to that section and review the entries. To see your forms: