1099-Q

[arahm]

I received a 1099-Q for my son who is a student and I claim him as a dependent.  The distribution was paid to me and I paid his qualified housing expenses.  Box 6 ("If this box is checked, the recipient is not the designated beneficiary.") is checked.  Turbo Tax is causing the distribution to be taxable to me.  Is there a place in Turbo Tax to offset the distribution so that distribution is not taxable to me?  Thanks.

[Carl]

When dealing with a 1099-Q it is *extremely* important that you work through the education section the way it is designed and intended to be used. If you do not, then chances are "extremely" high that you will *not* be asked for room & board expenses, and your 1099_Q income will therefore be taxable income.

So start over in the Education section and work it through the way it's designed and intended to be used.

[ostragoth]

This seems to be a Turbo Tax bug, or maybe faulty reporting from the 529 plan provider.  I had a similar issue.  I had two 1099-Q forms which were handled differently by Turbo Tax.  Here is my scenario:

1)  I had a 1099-Q from a 529 plan where I was listed as the recipient, but my son is the beneficiary.  In the case of the 529 plan, there was a $1,000 amount listed in box 2 ("Earnings").  When I selected myself as the recipient, Turbo Tax treated the earnings as income.  When I selected my son as the recipient, it said that my son needed to treat the earnings as income on his tax return.  

2)  I also had a 1099-Q from a Coverdell Savings Account wherein the 1099-Q was issued with my son as the recipient (with myself as "Guardian").   For the Coverdell 1099-Q, box 2 ("Earnings") was $0.00 - even though I definitely gained money on the account compared to what I put into it.  In the case of the Coverdell, the proceeds were not at all treated as income.

In BOTH cases, the proceeds were clearly used for education expenses, as per the 1098-T form that my son's college sent, where the box 1 amount was clearly greater than the sum of both 1099-Q's together. 

In the case of the 1099-Q from the 529 provider, either they should not be reporting earnings in box 2 or Turbo Tax is not handling this correctly, as I am reasonably sure that those earnings should not be taxable when they are used for higher education purposes.

[drjoe66]

I am having similar issues. In addition, we used the 1099-Q for private high-school expenses. TurboTax keeps talking about qualifying post-secondary education expenses, no mention of high-school. How should I deal with that?

[NCperson]

who is the recipient listed on the form?

if your child was the recipient and the student,  there is no need to input the form into TT for YOUR return (TT will inform you of that)

if you were the recipient and the child was the student, then input the form into TT and TT will ask you questions, one of which is the high school question.   

I tested it in TT Deluxe Desktop and it worked fine - no issues.

does that answer the scenario?  what version of TT are you using? 

[JRH13]

I'm not sure I understand what you mean. I have a 1099-Q with several entries and as I enter each one my tax owed rises dramatically. It appears that I am entering the information in the correct section, under Education expenses and ESA and 529 qualified tuition programs (Form 1099-Q). Any suggestions? 

[ostragoth]

See my prior post.  I have the same issue when I am listed as the "Receipient".  My version is TT Deluxe also.  I contend that it still seems to be a bug of sorts.