- Go to Screen 14.3, Education Distributions.
- Enter the Name of payer.
- Check the Spouse box if applicable.
- Complete the Dependent Beneficiary subsection only if this 1099-Q belongs to a dependent entered on screen 2. For all other 1099-Qs, leave the First name, Last name, and Social security number fields here blank.
- Scroll down to the Qualified Expenses subsection and enter any education expenses that may offset the distribution amount.
- Enter the amounts from boxes 1-5 in the applicable fields.
- If the distribution wasn't used to pay for qualified education expenses, leave Rollover: 1 = nontaxable, 2 = taxable (4) (code 304) blank.
Lacerte will generate a QTP Distribution Worksheet calculating the taxable amount of the distribution, if any. The taxable portion is reported on Form 1040 as Other Income, and amounts subject to additional tax will flow to Form 5329.
If the QTP Distribution Worksheet is not generated, and the taxable amount of distribution is not being calculated, verify that the Social security number field on screen 14.3 was not completed by mistake.