Including 1099-Q on college student's return

[lgehrig4]

I just finished my taxes (used Turbo Tax as well) and claimed the 1098-T. I am helping my son with his taxes now and when asked, I checked off "yes" to the question asking if he made a 529 withdrawal.

The entire withdrawal was used for tuition, however Turbo Tax never asked me to input any information for the form, which I find strange since he is required to report this. I've gotten to the end, but I don't want to submit it assuming that I do not need to include the 1099-Q.

[JillS56 · Accepted solution]

The 1099-Q is not required to be reported.   The general rule is if the 1099-Q distribution is enough to cover the tuition, room and board, other expenses, and Box 1 of the 1098-T is more than Box 5, then you might not want to report the 1098-T as this will create excess income and you will have to report the income as other income.   The 1098-Q does not have to be reported, but it does need to be taken into consideration and if you are going to attempt to get the AOTC credit, then you do need to report the 1099-Q on your taxes, which in your case, comes out that you owe income.  The 1099-Q should also be reported if the distribution was more than your tuition, room and board, etc.    

If you have claimed the 1098-T on your return and the amount of the 1099-Q was used to cover qualified educational expenses and the total amount of tuition less scholarships is more than the 1099-Q, then it does not need to be reported.   If on the other hand, the amount of the 1099-Q together with the scholarships, less tuition and less room and board there is excess 529 distribution, then those funds must be reported as other income on 1040.

529 Plan Rules