After entering 1099-Q for QTP, a calculation is made for "regular tax" resulting in taxable income from a Qualified Tuition Program. This taxable income then flows into 1040, Schedule 1. This should not be taxable income--the tuition expenses per 1098-T meet or exceed the distribution from the QTP. Does anyone know why this calculates an income? Or is this a glitch in the coding?
is there anything in box 5 of the 1099-T form?
also, recheck that you have entered the 1099-Q EXACTLY as the document shows. Go to 'forms view' and recheck. Also recheck each question related to education. I suspect one of the answers may have caused TT to think the distribution (the 109-Q) was not used for educational purposes.
I am no expert but have been really stumped by this, I have the same issue. I took (from my 529) less than I paid to the university so nothing should be taxable. I think the answer for me is on page 2 of the student information worksheet. It appears TurboTax is opting to have me take the American Opportunity Credit, but that reduces how much you can take as a qualified 529 distribution. You can't do both. I don't know if posting this link to another site article will help you. https://www.savingforcollege.com/articles/ask-an-expert-american-opportunity-tax-credit-765