1099Q and 1098T

[kudenchup]

I paid or my son's college tuition in 2025 utilizing a qualified 529 withdrawal (he is the beneficiary and I am the actual recipient).  My son is not listed as a dependent.  The 1098T confirms tuition payment was about $1000 more than the 529 withdrawal.   When entering this information into Turbotax (personal deductions & credits) using the questions posed for the 1099Q and 1098T tax forms, the only way I am not taxed for the 529 withdrawal is if I indicate that it was paid for a "qualified education loan payment" (with 0 loan interest amount).  Otherwise, I am taxed for the 529 withdrawal.  Am I better off just not entering the 1099Q and 1098T forms, even though those forms are evidently provided to IRS?  Or is citing payment for a "qualified education loan payment" reasonable (if no loan interest is declared or expensed on the tax return)?   Perhaps TurboTax needs to be more clear in their instructions on this section of their program?  Thanks!

[AmyC]

Both forms are considered informational, not mandatory.  

• The 529 was used for qualified education expenses which can include room and board,  even off campus, Since the 1099-Q was not income, it should not be entered. Tuck the 1099-Q into your tax folder. IRS Publication 970, Tax Benefits for Education states that nontaxable distributions should not be entered.
• The 1098-T with the qualified education expenses of $4,000 or more can qualify you for an education credit. If you qualify, enter the 1098-T to claim the credit.  Currently:
  • For the full credit, your MAGI (modified adjusted gross income) is less than $80,000 ($160,000 if you're filing jointly)
  • For a reduced credit, your MAGI is between $80,000 and $90,000 ($160,000 and $180,000 if you're filing jointly)
  • There is no credit given if your MAGI is above $90,000 ($180,000 if you’re filing jointly)

[kudenchup]

Thank you for this sage (and speedy!) advice!

[njdad100]

Thank you for the advice on 1099Q. Does that also apply to qualified 529 to Roth rollovers?

You referred to IRS 970 document. Can you pl. give the exact page number in that document; I would like to have that for my record.

[ThomasM125]

Yes, you do not need to report a Form 1099-Q distribution on your tax return if the distribution is not taxable.

You will find that documented in IRS Publication 970 . The online publication does not have page numbers, but you will find the excerpt in Part 6 Coverdell Education Savings Account (FSA). In the section that says Tax-Free Distributions it says the following:

"Generally, distributions are tax-free if they aren't more than the beneficiary's AQEE (adjusted qualified education expenses) for the year. Don't report tax-free distributions (including qualifying rollovers) on your tax return."