What is the 1099q form

Chris 2019-11-19 13:15:33 UTC #1

Now this will be the first year we have used the fund for college. I read about it before we made the distribution. It says the beneficiary will get the form mid January. It is up to them to file it. What is his form and what do they do with it. We have saved all the educational receipts do we do something with the receipts in this form? He has $250 left over. Thanks!

dcandmc 2019-11-20 13:59:20 UTC #2

The IRS Form 1099-Q is produced and issued by a 529 plan administrator to the recipient/s of 529 funds. It show the total distribution amount from the 529 account for the tax year, broken down into earnings and basis. For the recipient, the form is for informational purposes only; it does not get filed with a tax return. It may be useful in determining the taxability of any 529 distribution and for determining eligibility for education tax credits.

https://www.irs.gov/pub/irs-pdf/i1099q.pdf

https://www.irs.gov/pub/irs-access/f1099q_accessible.pdf

Chris 2019-11-20 15:41:27 UTC #3

So for his 529 plan he has been able to apply all the distribution to his tuition so far except 250.00 as of right now. What happens to that amount? Does it get taxed? I am hoping to use it to put towards next semester but just in case I want to be prepared if that doesn’t happen until the new year. Thanks!

dcandmc 2019-11-20 15:52:08 UTC #4

If he spends the remaining $250 from the distribution that he took this year on a qualified education expense (like a computer used for school) before the end of this year, there will be no tax owed. If he still has all or part of the $250 after the end of this year, there will be tax owed, and possibly also a 10% penalty, on the earnings portion of whatever has not been spent on a qualified education expense. If the $250 is used before the end of this year to help pay for next semester's tuition, there will be no tax owed. On the other hand, if the $250 is used after the end of this year, even for tuition or another qualified expense, that will be a problem.