Who pays the tax on a non qualified distribution from a 529 plan?

[mdw00d]

I overpaid my son's last semester of college tuition payment.  The college refunded the money to my son.  My son will (hopefully :-)) refund the excess payment back to me.

Following the example in IRS pub. 970, it would seem that my son would pay the tax & associated 10% penalty on the profit associated with the excess distribution.   However, if he were to then refund me with the balance, perhaps the IRS would expect me to pay the tax, esp. since I am taxed at a higher tax rate?

Does it make a difference if he only refunds me the principal (basis) and not the profit portion?

[JulieR · Accepted solution]

The person who's Social Security number is listed as the recipient on the 1099-Q is responsible for the taxes and must report it on their return.