Prior Year Distrib-TP

[confusedrf]

I'm doing my daughter's tax return using TurboTax and it looks like again she qualifies for the lifetime learning credit .... this would be the second year. However this time upon review a screen popped up that says check this entry. It says interest income worksheet prior year distribution-tp must be entered and it shows a form where it seems to show the 1099Q distribution amount for this year from schedule Q and then it seems to want me to put in prior year distribution....???  So this year it's about 18K last year looks like it's about 15K ...is that what I'm supposed to type in and how will it affect anything?

[confusedrf]

..... And then it asks for excess contributions in 2024. What does that mean?

I put zero in for now but it recommends a re-review and then it asks for contributions made 2023 and earlier.. again what is this The sum of everything we put in the 529 plan I am lost? 

As an FYI I put in the 15K I mentioned in my first post and zero for the next two amounts mentioned in this post... nothing seemed to change after yet another review but I like to know what I'm supposed to put in there before I file.

[KrisD15]

If the distribution was used for paying education expenses, and the student (or the taxpayer claiming the student) is also eligible for an education credit, there are options. 

Part of the distribution can be claimed as income to free-up expenses for a credit.

It sounds like this is what's happening in your situation. 

(When you click "Maximize my tax break" TurboTax decides, you can search   letme    and change if desired) 

The program is asking the questions in order to determine your basis in the education savings account.

The 1099-Q shows earnings for the distribution, but the program wants to determine the earnings in the account balance. 

IRS Pub 970 page 45 explains the calculation