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YaMu
Level 2

529 distributions - 1099-Q - right way doing it

I am an account owner on path2college529.com. I am the parent of 2 kids that go to college now. I contributed my money to these accounts over last 20 years and now I intend to use this money for kids college expenses and to use the state tax benefits on my tax return {not to get taxed on distribution/earnings}.

 

I did not realized that but when I made distributions in 2023, I once chose myself as a recipient once, and my daughter as a recipient the second time.
What is the right way to do it?
I received one 1099-Q with me as a recipient, with box 6 flagged, as "recipient is not the designated beneficiary", and the second with my daughter's name as a recipient.
I see there are 2 main questions when doing the distribution:
1. Will these funds be used for "daughter's name" qualified expenses? I answered "yes"
2. To whom should we send funds? Here is (i believe) where the discrepancy occurred.

 

Should it be me or my daughter?
Can I fix last year's 1099-Q?
Thanks!

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1 Reply
KrisD15
Expert Alumni

529 distributions - 1099-Q - right way doing it

You can't "fix" last year's 1099-Q.

If the funds distributed in your name went towards your daughter's education expenses, choose your daughter. 

 

Going forward, make distributions for your daughter's education expenses in your daughter's name. If you transfer funds directly to the school, the 1099-Q will be issued to the student as it should be. 

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