Level 2

1099-Q Issued to Mom's SSN, But Money Given to Non-Dependent Son For Grad School

Forum|Forum|5 years ago
April 8, 2021
1 reply
14 views

Hello,

I have a client who contributed to a 529 plan for years when her son was growing up. She never took money out of the 529 when the son was a dependent and attending undergrad school because the son received a full scholarship for his undergrad. Now the son is in his 30s, married, lives across the country, etc. and attending graduate school (hasn't been a dependent for 10 years). My client (his mom) took out $50,000 from the 529 plan in 2020 to help him pay for graduate school. The 1099-Q is issued to the mom's SSN, the 1098-T was issued to the son's SSN, and the son is no longer a dependent on the mom's return.

Is my client (the mom) stuck with paying tax on the 1099-Q distribution??

Thanks!

This topic has been closed for replies.

sjrcpa

Level 15

Not if it was used for qualifying education expenses.

The more I know the more I don’t know.

T

timtaxAuthor

Level 2

It was all used for her son's graduate school tuition. Since I am required to report the 1099-Q on my client's return, what are the next steps to ensure that she doesn't pay tax on that 529 distribution?

sjrcpa

Level 15

The software should have a place to enter the amount of the distribution spent on qualifying expenses.

The more I know the more I don’t know.

Sign up

Login with SSO

Let's get you signed in

Login with SSO

Scanning file for viruses.

This file cannot be downloaded