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Level 1

Dependent child

We lived in Indiana and moved to Texas.  Our daughter still maintains residency in Indiana and attends college there as well.  She filed her taxes as a single living in Indiana and did not declare she could be claimed as a dependent.  I was working on my taxes and removed her on my taxes but then ran into questions about my 529 withdrawal to pay for her schooling.   It appears I must declare her as a dependent. or order to not pay taxe on the withdrawal.  We still support her but she lives in Indiana.  I can answer questions about dependent status and get she is and she is not.  Does she have to amend her return?  Do I wait for her amended return to clear before I file electronically?   How do I not have to pay taxes for my withdrawal if the money went to pay for her education.

3 Replies
Level 10

Dependent child

If all of the 529 withdrawal funds were used for qualifying education expenses, then you can choose not to include the 1099-Q on your tax return.  The IRS does not require you to file the 1099-Q.  It also says in the directions for the form that you do not have to enter it on your taxes.


But you do need to keep a copy of the 1099-Q and all of the financial records to show that the funds were used for your daughter's education expenses.  This is in case the IRS does question you about it at some point.


But, if you do enter the 1099-Q, in TT,  one of the first questions is who is the student. When you select  someone not listed here or a beneficiary that's not a dependent on this return (the wording varies), you will be given a screen to enter her expenses, including room and board.



IRS 1099-Q

Level 1

Dependent child

So, I am not obligated to claim by daughter as a dependent based on her not being a resident of my household in Texas even though I support her?

Expert Alumni

Dependent child

No, you are not obligated to claim your daughter as your dependent.

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