Form 1099-Q and Form 1098-T

[Lizzy1217]

My son who is going to Community College received a Form 1099-Q from Florida College Prepaid and his name is the recipients and his social is in the recipient's TIN box, but I am the owner who paid for the Florida College Prepaid plan. He also received a Form 1098-T from the Community College. I am the one who pays for tuition and books that the plan does not cover. I read in a previous post that my son should enter the data from Form 1099-Q in his return and I can enter Form 1098-T in mine. My son only worked 2 months in 2020 and earned $2681 in box 1 and $57 in box 2 of his W-2.  Question 1: Does my son need to do a return for 2020 even if his earned income is $2681? Question 2: In case he does, I created a return for him in Turbo Tax and it started showing a refund of $57 until I entered Form 1099-Q which appears as if he had income and changes his refund to $1, is this the right thing to do? Question 3: In my return I am adding him as dependent, can I add the Form 1099-Q and Form 1098-T in my return since he is my dependent? Question 4: Should my son do a return with only W-2 and not Form 1099-Q and I do a return with him as dependent and his Form 1099-Q and Form 1098-T?

[Kbichard · Accepted solution]

You can claim the education credits since he is a dependent on your return.
He can file his own return - just the W2, to receive the $57 they took out in federal taxes.
Make sure he indicates on return he files that he can be claimed by another person.

[Lizzy1217]

OK. My son will file a return with his W-2 only and say that he will be claimed by another as dependent. Then I will claim him on my return and enter Form 1098-T data, what happens to Form 1099-Q? Should I disregard it in the returns and file it for my records?

[AmyC]

If the 1099-Q was used for qualified education expenses, it does not need to be filed on the tax return. You can tuck it away with your other tax paperwork. If you do want to file, be sure to use expenses like room and board. See 529 for Room and Board. Even a commuter has to eat.