529 plan

[hunterdoh]

my daughter recieves scholarships, we withdrew $ as nonqualified with the understanding that we are only liable for taxes on the gains...and not a 10% penalty.  will Turbotax be able to differentiate between gains and penalty?

[OmM1]

Hello hunterdoh

Great job at savings for kids education and great job by your daughter in getting scholarship so that you need those funds any more for educational purpose. Congratulatios!

1099-Q Form that you will receive from your financial institution, for the withdrawals you are making will identify and divide the gross distribution into basis and earnings. You will enter this information from your 1099Q in TurboTax and it will ask you questions to see if you qualify for no penalty withdrawal.

Hope this answers your question.

[KeithS-2020]

Hi, @hunterdoh. Assuming you didn't take more out of the 529 than your daughter received in scholarships, the information you have received is correct.

Yes, TurboTax will walk you through avoiding the penalty due to the scholarships.