when I enter a 1099-Q for money I received from a 529 to pay for my child's expenses my taxable income goes up. The gains are supposed to be tax free. How do I fix this?

Answer

Yes, Carl is right, the student may be your dependent. 

If not, here is how to enter the 1099-Q: 

When you enter the 1099-Q, be sure to answer the interview questions that follow.

On the "Who's the student?" screen, select "Someone else not listed here"

The program asks what it was used for, if you select education, it will not be taxed. 

You will need to touch base with the student so that the same education expenses are not claimed by both you and the student.

You can also have the funds transferred to the school, in which case the 1099-Q will go to the student. 

[edited 03.18.2019 9:42 pm]

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TurboTaxKrisD , EA Enrolled Agent
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