My son married in 2020 so he is no longer a dependent. His 529 has me as the recipient and him as the beneficiary. The money is deposited into my account, then I pay the college. It seemed very confusing when I was doing my Turbo Tax. It basically erased the prior year info regarding him since he is no longer a dependent. Don't I have to show this 529 qualified withdrawal since I am the recipient? I would think the IRS would consider that as income if I didn't?
Form 1099-Q is a form that does not have to be reported. Since you are not claiming your son you are not able to report the 1099-Q. If you used all the money you withdrew from your QTP or Coverdell ESA to pay for qualified education expenses, and meet other IRS requirements, the distributions aren't taxable and you don't need to report them as income. Just file your 1099-Q with your tax records.
Should my son have reported that on his tax return? Thank you for your advice.
It depends. The person who receives the funds and whose Social Security number is on the form has to report the 1099-Q on their tax return.
Whose social security number is on the 1099-Q? Keep in mind that there is no need to report the 1099-Q if the 1099-Q was used for qualified educational expenses. Only the amount that was not used for qualified educational expenses has to be reported as other income.
The social security number is mine on the 1099's. I have 2 dependents & 1 non-dependent as beneficiaries (3 different 529's). The money is always spent for educational purposes. The 1098t from the colleges reflect most of the funds being used, but we do withdraw extra for textbooks, etc. Are you saying that I can skip that entire section of the tax form as long as the money withdrawn was used for higher education? I just figured I had to show the IRS everything.
You can ignore the 1099-Q form on your tax return, and keep it with your other tax documents for record-keeping. If you do receive a notice from the IRS, a simple response with proof of educational expenses should easily resolve the matter.