Missing Information on TurboTax 2026 (For 2025 Tax Year)

[bobarcher1946]

Withdrawal funds from 529 plan to pay for room and board for granddaughter. In 2024 the program worked just like it was meant to. There was a page that allowed you to check boxes for expenses that the withdrawal funds were used for, the next page then stated there is no tax on the withdrawal. (The funds are not taxed as long as the total for the year is at or below the AOC (Cost of Attendance) for tuition, fees, room, board, furniture etc. The AOC depends on whether you are in state or out of state. Out of state has a higher AOC.  

TurboTax 2026 (For tax year 2025). does everything but there is not box to list your expenses. The program just taxes the withdrawal. 

[AmyC]

If the entire 1099-Q is used on allowed expenses, the Q should not be entered. Delete it. Tuck it into your tax folder.

Reference:

IRS Publication 970, Tax Benefits for Education states:

If the entire 1099-Q went to qualified expenses, room and board, tuition, etc then you do not need to enter the form. Tuition paid for the first 3 months of the next year also qualify, see page 12, What Expenses Qualify, and page 52 for qualified distributions.

Page 45  repeats: Don't report tax-free distributions (including qualifying rollovers) on your tax return.

[bobarcher1946]

I understand that I do not have to send or respond to the 1099Q. However, TurboTax should be corrected. Last year you could enter the 1099Q and it would state that there is no tax on the distribution. It is something you can file in case you were audited. The program last year would allow you to check boxes of the different expenses before determining whether any of the distributions were taxed.

Leaving the program as is and telling customers you don't need to be concerned is a short cut to avoid fixing the issue. Fix the issue.

Thanks