Forgot to account for 1099-Q

[bridgeman01]

Hi all,

I am a student currently enrolled in college. I filled my taxes through turbotax utilizing my W-2 (I work on campus) and 1098-T (I inputted my education expenses and all of that fun stuff in addition to my scholarships) but didn’t realize that a Prepaid plan that I receive money from for classes is classified as a 529 plan, meaning I have to account for it in my taxes. I went to amend my return and after inputting the data from my 1099-Q there was no change in my refund amount. Does this mean I don’t need to amend my return? I’ve read some sources that have told me the 1099-Q is simply an informational document and that if turbotax calculates that there isn’t a change in your refund (therefore those expenses were utilized for education) you don’t need to report it as income (and therefore I don’t need to amend my return). Please let me know if I am understanding this correctly, thank you in advance!

[JillS56]

Yes, you are correct that Form 1099-Q is an information document.   You do have to report it on your return unless it will affect the tuition credit that you may be entitled to.  

What you need to do is determine what your total tuition is from Form 1098-T, then subtract your scholarships in Box 5 from the amount of tuition in Box 1.   You should then subtract the remaining tuition from the amount reported on your 1099-Q.   If there is not an excess available to claim a tuition credit from you can either not report the 1098-T and 1099-Q as there is no requirement that either form needs to be reported on your return.  Or you can report both forms and if no credit is available it will not give you a credit.   If a credit is available and you enter both forms 1098-T and 1099-Q you will get the credit.

As to whether or not you need to amend, if you have gone ahead and entered the 1099-Q and TurboTax is saying nothing changed, I would recommend that you double-check that you do have excess tuition to which the credit can be applied.   In the event, you have excess tuition to claim the credit and everything else is the same, then you do not need to amend your return.

NOTE:  If you need to amend your return, make sure you do not file any amendments until you know that your original e-filed return has been completely processed.

[bridgeman01]

Thank you so much for your reply!

In my case, the amount of scholarships in Box 5 largely exceeded that of the tuition paid in Box 1, which I know means I must pay taxes on that portion of the scholarships (originally after this step, turbotax said I owed). However after I entered both the amount of the scholarships that I utilized to pay for educational expenses as well as the amount of the scholarships that I utilized on room and board, that is when turbotax informed me I qualified for both educational credits, and therefore a refund (I believe because that value combined was greater than the difference between Box 5 and Box 1, which is where the excess amount came from?), even with the data from the 1099-Q already entered. Does this confirm that I have excess tuition to which the credit can be applied? Thank you again for your help.

[JillS56]

As long as you have entered your tuition and room and board, and these amounts exceed the amount of scholarships and the 1099-Q, you would be entitled to the education credit.    If everything is entered correctly and TurboTax is telling you that you are entitled to the credit, you should be good.  

If you manually add up the tuition and room and board and then add up the scholarships and 1099-Q is the difference a positive amount.   In other words, are your expenses more than your scholarships and 1099-Q?  

You should be good then.