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New Member
posted Jun 3, 2019 6:02:40 PM

If I withdrew from a 529 in December for expenses in January what can be done to avoid taxes and penalties?

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2 Replies
New Member
Jun 3, 2019 6:02:42 PM

The distributions do fit the definition of a "Qualified Education Expense" however the 1099Q does not reflect the amount of the tuition paid in January.  1.  can modify the amount of the 1099Q to reflect the tuition paid in 2016 to reflect what was paid in January also or. 2. should I roll this over and. 3. how can it be rolled over

Level 9
Jun 3, 2019 6:02:43 PM

Your distributions from 529 plans are generally reported on Form 1099-Q. Those distributions aren’t subject to federal tax if you used the funds to pay for qualified education expenses. You often don’t have to pay state tax either. However, distributions that exceed those expenses can be taxable.  

NOTE: Your contributions to a qualified college savings plan are not deductible on your federal return, but may be deductible on your state return. If your state allows a deduction, you will see the entry point as you work through the state return. You can find more details here Information on 529 Plans

And if you received a 1099-Q, you can use the steps below to enter that form. 

TurboTax Desktop Users:

  1. Click Search Topics at the top
  2. Type in 1099-q and select it from the list and click Ok
  3. This will take you right to that section and click Continue on the Form 1099-Q page and follow the prompts to enter that information

TurboTax Online Users:

  1. Log into your return, click orange Take me to my return button
  2. In the search box, search for 1099Q 
  3. Then click Jump to 1099Q link in the search results.
  4. On the Form 1099-Q screen, click Continue and choose the person it's for.
  5. On the 1099-Q Information screen, enter all details exactly as they are on your Form 1099-Q