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Taking 529 withdrawals for a full time student who was a dependent for 5 months

Forum|Forum|7 years ago
February 15, 2019
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My son was a full time student in NY for 5 months and took a job in June. So he was a dependent till May and not after that. We withdrew from his NY state 529 account for the Spring 2018 semester expenses. I need to reconcile that qualified withdrawal with the 1098-T from his school. Since he was was not a dependent for the whole year, his worksheet disappears from Turbotax. How do I account for the qualified 529 expenses in my tax form?

Thanks

Best answer by asteroids

I found the answer for the question I asked. The answer is not obvious. The problem was, since the student is not my dependent for the entire year, there is no dependent worksheet for him in the tool. But, there is a way to link the student to my tax through the form 1099-Q. Once the 1099-Q is created, the bottom of page 1 of that form in Turbotax has Quickzoom that expands to the appropriate student worksheet. It already contains the number from the school 1098-T and the withdrawal information from 1099-Q. I needed to enter the additional eligible expenses not included in 1098-T. If the total eligible expenses are equal to or more than the withdrawal amount in 1099-Q, Turbotax calculates the taxable amount of the withdrawal to be zero. Otherwise, the tool calculates the taxable income and adds it to 1040. So the final result is what I expected.

J

JRH13

I am running into the same exact problem. I was thinking of using the Turbotax advisor, but am curious to find the answer without trying that option. This is the second major bug that I have encountered with the software this year. Very frustrating.

A

asteroidsAuthorAnswer

I found the answer for the question I asked. The answer is not obvious. The problem was, since the student is not my dependent for the entire year, there is no dependent worksheet for him in the tool. But, there is a way to link the student to my tax through the form 1099-Q. Once the 1099-Q is created, the bottom of page 1 of that form in Turbotax has Quickzoom that expands to the appropriate student worksheet. It already contains the number from the school 1098-T and the withdrawal information from 1099-Q. I needed to enter the additional eligible expenses not included in 1098-T. If the total eligible expenses are equal to or more than the withdrawal amount in 1099-Q, Turbotax calculates the taxable amount of the withdrawal to be zero. Otherwise, the tool calculates the taxable income and adds it to 1040. So the final result is what I expected.