Do both parent and child report same 1099-Q?

For several years, we've contributed to a Coverdell ESA for our daughter with no withdrawals.  In 2011, we had to take a full withdrawal to put towards our daughter's private school tuition (tuition was more than ESA payout).   We received 1099-Q showing Gross distribution, and it is in our daughter's name with my wife listed on second line as "AUTH PER".   

Do we file the 1099-Q on our taxes?  Do we file it on taxes for our daughter?   Turbo Tax allows me to enter it on my our taxes but with our daughter as the beneficiary, so it's very confusing exactly where I'm supposed to enter this info...our taxes...her taxes...both taxes?   So far, no luck finding specific answer in Help searches.
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    I had the same question and searched all over the Turbo Tax website, the internet and the IRS web site.  The answers are quite varied.  So I called the IRS and sat on hold for an hour and fifteen minutes.  Then I got Mrs. Evans, 1000705634.

    We have a dependent daughter and a 529 account.  We got two 1099-Q's.  
              one with my wife's SSN (The amount we withdrew to pay for room and board, books, computers, etc.)  
              one with my daughter's SSN (the amount was the direct payment to the university for tuition and fees)
               Our Student has earned income from teaching and from an undergraduate research fellowship.

    The answer depends on several conditions:
    1.  2011 Return 1099 -Q is For a 529 Qualified Tuition Plan  (Not a Coverdell ESA)
    2.  We are claiming the student as a dependent on our return
    3.  We are claiming an American Opportunity Credit

    If the  Distribution is less than total Qualified Educational Expenses (Don't have to report and it does not matter which return you enter the 1099-Q, ( in our case I put it on the parents.)
    or
    If there is an Excess Distribution (which is taxable)
              Enter the 1099-Q to the return which matches the Social Security Number
              Enter the 1098-T on the parents return
              Split the other (non-1098-T) educational expenses, (books, room and board, computers, etc)  but the              dependent's expenses cannot exceed the total of the 529 distribution plus the student's earnings)
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      I find going into "View" and picking "Forms" necessary to deal with all of my child's expenses, etc. Look for "Dependent Wks" and under that "Student Info Wk"  You will see what TT is using to make the calculations and can override information if necessary.  This seemed to be the only way I could find to deal with the 1099-Q.
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        You will enter it.

        When we ask for the student, the dependents are listed on the screen.  You select your dependent/student and fill out the 1099-Q.  Be sure to enter Box 6 on the 1099-Q.    TurboTax expects that box to be checked to indicate that the Recipient is not the Designated Beneficiary.  Then you are asked who is the Recipient of the 1099-Q.  It should be the Taxpayer of Spouse for this 1099-Q to be included on your return.

        This issue will not impact you unless your Dependent/student 1099-Q distribution either exceeds the Education expenses or the 1099-Q exceeds the Education Expense less the Amount of expense you allocated for the Education Credits.   Typically the maximum to allocate for the Education Credits is $ 4,000.

        1a.  Here's how to get to the 1099-Q screens in the TurboTax Online:

        Select the Tools button in the upper right-hand portion of the screen.
        Select Topic Search.
        When the window opens, type "1099-q" into the box, select the item that best describes the 1099-Q that you received, and then select GO.
        Follow the on-screen instructions to enter the information from your 1099-Q.

        1b.  Here's how to get to the 1099-Q screens in the TurboTax desktop or CD/download version:

        Enter the cursor into the search box in the upper right-hand portion of the screen.
        Type "1099-q" into the box, click on the item that best describes the 1099-Q that you received.
        Follow the on-screen instructions to enter the information from your 1099-Q.

        2.  This is a two-part process to determine what amount of the distribution received from a qualified tuition program is taxable, if any is. Once you enter the 1099-Q information, you must then go to the Education Expenses section and answer the applicable questions. Education Expenses is located under Federal Taxes, Deductions & Credits.


        For more detail see IRS Publication 970 about Coverdells at http://www.irs.gov/publications/p970/ch07.html#en_US_2010_publink1000178471
        • There's still some abiguity...let me be more specific.  The 1099-Q came with daughter's name listed first and her SSN as beneficiary/recipient.  My spouse is listed second as AUTH PER.   She is 15, and we used it all to pay a portion of her high school tuition.   She needs to file taxes for a small $115 amount she made working part-time.   I've seen postings that indicate she must include it on her filing, that we must include it on our filing, and that no one must include it because the qualified expenses are more than the payout (just keep the receipts).   In reality, she is our dependent and we pay her expenses, but since the 1099-Q came with her name first, it seems like she should report it, plus that part of the tuition as her education expense (to cancel it out), and then we are on the hook for remainder.

          We have the exact same situation with our 17year high school son, so we the identical question for his situation.
        • I completed both my return and my son/student's return on Turbo tax.  I entered the 1099-q on my son's return.  It does not show anywhere on his return or worksheets that it was entered or reported.  He is claimed on my return as a dependent and we claim the tuition for the tax credit.  The expenses that were used for the educational account were for room and board and other college expenses allowed by the IRS for qualified educational account expenses. Why does Turbo Tax not show that the 1099-Q was not even entered.  It shows on the entry screen, but not on the worksheets attached to the return.
        • Ok, this is crazy.  I'm seeing different answers from the same TT Pro on the same question.  Parent has kid who makes nominal income, parent recieves 1099-Q that is in child's name/ssn but also lists parent as custodial, the distribution is completely used for qualified expenses...so who claims it?

          On the official IRS Publication 970 regarding Coverdell ESA, it clearly states this:  "Generally, distributions are tax free if they are not more than the beneficiary's adjusted qualified education expenses for the year. Do not report tax-free distributions (including qualifying rollovers) on your tax return."

          Given that I can show qualified private high school tuition that exceeds the payout, I'm tempted just to not even list it at this point.
        • I find the answer confusing as well. Publication 970 on page 79 Appendix B lists all expenses that can be used for Coverdell ESA distribution.  On my return, I entered all the tuition and fees over $4,000 allowed to get the American Opportunity Act credit.  On my son's return I have tried to enter the 1099-Q.  Turbo tax lets me enter the info, and when it asks for who the distribution is for I checked my son's name.  It will not let me enter any Education expenses since he is my dependent.  When I look at the worksheets online in tax return preview, it does not have the box checked that he received a 1099-Q distribution.  The information is still entered in the miscel. income section of turbo tax, but it keeps removing his name and leaving all choices as blank as to who the 1099-Q is for. We have spent more than the 1099-Q distribution in Room and board, books, fees and tuition.  Turbo tax does not have a screen to allow me to enter what expenses totaled to off set the 1099-Q.  I do not want to file the return and have the IRS come back and say it is taxable.  Please tell me what to do to show we have correctly entered the 1099-Q and have expenses to offset the distribution. Your software doesn't allow for any education expenses if the return is for a dependent of another. Help!
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