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Entering 1099-Q section 529 withdrawal in ProConnect Tax

by Intuit•5• Updated 1 month ago

For tax years 2025:

The One Big Beautiful Bill will be increasing the annual limit and expanding the use of 529 funds. Review IRS Pub. 970 for tax year 2025 changes once available.

Follow these steps to enter a 1099-Q Section 529 withdrawal:

  1. Go to the Input Return tab.
  2. From the left of the screen, select Income and choose Education Distributions (1099-Q).
  3. Enter the Name of payer.
  4. Locate the Education Distributions (Form 1099-Q) section.
  5. Scroll down to the Qualified Expenses subsection and complete any applicable fields:
    • Higher education (net of nontaxable benefits)
    • Elementary and secondary education (net of nontaxable benefits)
  6. Scroll down to the Form 1099-Q subsection and complete any applicable fields with amounts from the 1099-Q.
    • If not used towards educational expenses, leave the (4) Rollover: 1=nontaxable, 2=taxable field blank. The program will carry the distribution to Form 1040 as other income.
  7. Enter a 1 or 2 in (5) 1=private 529 program, 2=state 529 program, 3=Coverdell ESA.

New in tax year 2024 distributions made after December 31, 2023, a beneficiary of a section 529 qualified tuition program is permitted to roll over a distribution from a section 529 account into a Roth IRA for the beneficiary if certain requirements are met. See IRS Pub. 590-A for more information.

New in tax year 2024 distributions made after December 31, 2023, a beneficiary of a section 529 qualified tuition program is permitted to roll over a distribution from a section 529 account into a Roth IRA for the beneficiary if certain requirements are met. See IRS Pub. 590-A for more information.

To enter this distributions

  1. Go to Input Return ⮕ Income ⮕ Education Distributions.
  2. Enter the Payer information from the 1099-Q.
  3. In the 1099-Q section enter lines 1-5. For line 4 enter a 1 for nontaxable.
  4. For CA filers, CA does not conform to the federal rule and requires an adjustment to be made.
    • Go to Input Return ⮕ State & Local ⮕ Modifications and select CA Modifications. Enter the addback amount on the Qualified IRC 529 tuition plan rollover to Roth IRA line.
    • If additional tax is applicable go to Input Return ⮕ State & Local ⮕ Taxes and select CA Taxes. Enter the amount subject to CA Additional Tax in the Qualified IRC 529 Tuition Plan Rollover to Roth IRA Subject to Additional Tax line.

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