1099Q 529 Distribution

Forum|Forum|4 years ago
March 19, 2022
3 replies
24 views

I have a 529 plan for my Granddaughter. I had $4000 sent directly from the plan to her college for the first semester in 2021.

Her 1098-T showed $4570 tuition and $2125 in scholarships (I Reported the1098-T on her parent's return)

Her 1099-Q (I reported on her return) shows the Distribution of $4000 and Earnings of $1600

Software is saying she owes tax on the "excess withdrawal"

Want your opinions on whether I've reported this right and if I'm missing something.

ProSeries Basic

This topic has been closed for replies.

Best answer by Shirley79

Your first comment about "where did the rest of the money go", is exactly what woke me up last night !!!

What does QHEE stand for and can you explain that comment a little more about excluding 529 earnings from income?

Thank you.

rbynaker

Level 13

1098-T forms are notoriously unreliable. Follow the money. If tuition really was $4,570 and $2,125 was covered by scholarship, that leaves $2,445 leftover. What happened to the rest of your $4,000?

See IRS Pub 970 Chapter 7 for qualified higher education expenses in addition to tuition:

https://www.irs.gov/pub/irs-pdf/p970.pdf

i.e. Room and board won't be included in the tuition amount but will be QHEE to exclude 529 plan earnings from income.

S

Shirley79AuthorAnswer

Level 5

Your first comment about "where did the rest of the money go", is exactly what woke me up last night !!!

What does QHEE stand for and can you explain that comment a little more about excluding 529 earnings from income?

Thank you.

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