My son will file a return with his W-2 to get back $57 that was withheld and indicate that he will be claimed by another as dependent. Then I will claim him on my return and enter Form 1098-T data, what happens to Form 1099-Q? Should I disregard it and file it for my records?
Please clarify - was the 1099-Q issued to you or your son, i.e. whose SSN is listed as recipient?
My son is going to Community College and received a Form 1099-Q from Florida College Prepaid and his name is the recipients and his social is in the recipient's TIN box, but I am the owner who paid for the Florida College Prepaid plan. My son only worked 2 months in 2020 and earned $2681 in box 1 and $57 in box 2 of his W-2. I created a return for him in Turbo Tax and it started showing a refund of $57 until I entered Form 1099-Q which appears as if he had income and changes his refund to $1. In a previous post I was told my son could do his return with only W-2 so he received his $57 and indicate that he will declared as dependent on another return. My new question is, what do I do with Form 1099-Q, disregard it and not add it to my, but file it for my records?
As long the distribution was used to cover qualified educational expenses, he does not have to report it on his return - you can disregard it and file it in your records.
You cannot, however, "double-dip". In other words, if you are claiming an education credit (for him) on your return, you cannot claim the same expenses he is using to get tax-free treatment of his 1099-Q distribution.
See @HalAl 's answer in the middle of the following post: My son is nondependent who files own income tax. We withdrew 529 funds and used for his education. On which tax return does the 1099-Q and 1098-T go on? His or mine?