1099 q and 1098 t difference

Forum|Forum|3 years ago
April 9, 2023
1 reply
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529 plan directly paid tuition for 2023 spring semester to my university in Dec 29, 2022 however it showed in university system on Jan 5, 2023 that they received the payment. Hence 2022 1099 T does not show the amount whereas 1099 Q showed that I withdrew the money. How do I reconcile this?

KrisD15

Level 15

The 1099-Q and 1098-T are used to make calculations.

Distributions can be applied to Room and Board OR Tuition/Fees, to be non-taxable.

Scholarships may only be applied to Tuition/Fees, or they are taxable.

More information would be needed, such as whether you are applying for an education credit,

but basically, the payment shown on your 1099-Q may be offset by the payment that will post in 2023.

If the distribution was used for education purposes, leave the 1099-Q out of the program and lower the expenses you claim if you are applying for a credit.

If the distribution went all to Room and Board, you can leave the 1099-Q off and no other adjustments are required since Room and Board cannot be used for a credit.

If the distribution covered all the tuition, and there was no scholarship in Box 5, you can leave the 1098-T off as well.

If the distribution covered PART OF the tuition, enter Form 1098-T and adjust the amount in Box 1 so that it reflects what you paid out of pocket in 2022. Don't include the portion of the distribution for the 2023 payment, you will adjust for that next year (adjust Box 1 DOWN by the amount on the 2022 1099-Q that paid for the 2023 1098-T)

If you WANT to enter your 2022 1099-Q, use the link under Box 1 on the 1098-T entry screen and increase Box 1 to reflect the portion that crossed calendar years.

Forms 1099-Q and 1098-T are used to

Get an Education Credit (based on expenses paid over assistance, such as Distributions, and Scholarships)

Claim taxable income for assistance received that was not used for education expenses.

If neither of these apply to you, you can leave the Forms off, the program does not need these numbers if they are not needed for a calculation.

Be sure that next you you do not use the expenses reported on the 1098-T that are allocated to the 2022 Distribution.

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rkvshAuthor

Level 2

Many thanks for your quick reply. My tuition (only) is paid by 529 plan. Room and board, I paid from my personal account. The tuition bill is directly sent to the university by the 529 plan. I got the spring tuition bill in Dec 2022. My parents told the 529 plan to send the payment to the university on Dec 29, 2022 which university received in the January 5, 2023. Hence 1099 Q shows the Dec 29 payment whereas 1098 T does not show because they received it in 2023. Hence 1099 q shows more money (equivalent to the spring 2023 tuition bill they paid) than the 1098 T. My main concern is that IRS will think that I withdrew more money than needed to pay the 2022 tuition.

RobertB4444

Level 15

Thanks for all your help.

One last question. We have a similar issue for 529 Plan funds we used for my daughter's private autism school back in 2022. The 1099-Q didn't process until 03-Jan-2023....however the school doesn't issue 1098-T.

In this case TurboTax allows filling out a pseudo 1098-T by putting in the schools tax number and amount paid for tuition. Should I even bother doing that or just not input 1099-Q or pseudo 1098-T for this private autism high school?

Do not bother. If the 1099-Q is used for education purposes then it does not need to be entered on the return.

@blw44

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