Recipient is not designated beneficiary

[thefivegs]

1099-Q I am listed as the recipient, but the funds were used to pay my son's educational expense and he is the beneficiary.  When I check block 6 my taxes increases reflecting I need to pay taxes on this distribution even though it was used directly for my son.  How do I enter this information?

[KrisD · Accepted solution]

Please enter the information from the 1099-Q first, and then enter the corresponding education expenses next. This should allow the program to apply the distribution to the expense.

The 1099-Q was sent to you if you are the account holder and the funds were not made directly to the beneficiary or the school.

If the funds did go directly to the educational institution, you will need to contact the issuer and have the 1099-Q corrected.

If the funds went through you, and paid for education expenses, you do not have to claim those funds as income, BUT you and the student cannot use the same expenses towards other tax-free assistance or towards applying for an Education Credit.

If the distribution doesn’t exceed the amount of the student's qualifying expenses, then you don't have to report any of the distribution as income on your tax return. If the distribution exceeds these expenses, then you must report the earnings on the excess as "other income" on your tax return. When you pay a student’s school expenses with these funds, you cannot claim a tuition deduction or either of the educational tax credits for the same expense.

(edited 2-27-17)

CLICK HERE for a guide to the 1099-Q

CLICK HERE for more information on the 1099-Q

[stmicheldc]

See these user-provided answers for how to account in TT for the situation in which the qualified expenses paid by a parent equal a distribution made to the parent, so that the distribution should not be taxable.  The TT supplied answer above stated the law but did not explain how to make the correct entries in TT.  Note, you must enter your 1099Q information before the correct interview questions regarding expenses will come up.
 <a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/2801059">https://ttlc.intuit.com/questions/2801059</a>
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/2768547">https://ttlc.intuit.com/questions/2768547</a>

[Dleslievol]

I am having difficulty with my 1099Q. I am listed as the Recipient and I am paying for my sons school. I have spent more than I have withdrawn. As recepient it is my name and FBO my sons name. Since my SSN is listed as receiving the funds I assume I need to enter what was taken. I cannot find any place to offset this amount in TT. The penalty is costing me several thousand of dollars. How can I adjust or fix this?

[JohnW222]

Did you answer no to "Were you the beneficiary?" and yes to "Did you receive a Form 1099-Q?"? in the 1099-Q interview? 

If you did, you need to enter your child's education expenses in the Education section of the TurboTax program under "Deductions & Credits."

If not, you're not sure, or you can't find your response, try deleting the 1099-Q you've already input.  Please see "Tips and tricks" in the TurboTax Help article "How do I view and delete forms in TurboTax Online?" for guidance.

Then, follow the instructions in "Where do I enter a 1099-Q?" to re-input your data.  Be sure that you answer no to "Were you the beneficiary?" and yes to "Did you receive a Form 1099-Q?".

When you're done with the 1099-Q inputs, enter your child's education expenses in the Education section of the TurboTax program under "Deductions & Credits."

[shirlkoul]

I am lis

[GiseleD]

Your question got cut off. This is all we can see:

"Re: Recipient is not designated beneficiary

I am lis"

Please repost your full question, and we will do our best to assist.