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Entering 1099-Q section 529 withdrawal in ProConnect Tax

by Intuit•4• Updated 2 weeks ago

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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