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Old 03-16-2014, 10:44 AM
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1099-q/1098-t

I have 529 plan for my daughter and took out distribution in 2013. I am claiming her in my tax this year as a dependent and she got 1099-Q ( $ 28,787.00)and 1098-T ( $43,214,00)
under her tax ID number. Do i need to file tax for her?
Thank you for your help.



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Old 03-17-2014, 05:37 AM
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Join Date: Oct 2010
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Quote:
Originally Posted by waynekim View Post
I have 529 plan for my daughter and took out distribution in 2013. I am claiming her in my tax this year as a dependent and she got 1099-Q ( $ 28,787.00)and 1098-T ( $43,214,00)
under her tax ID number. Do i need to file tax for her?
Thank you for your help.
what do you mean by “Do i need to file tax for her?”

i guess this is your situation;The advantage with having the check made payable to the student is that the Form 1099-Q reporting the distribution to the IRS shows the student's name and Social Security number. If the student incurs qualifying higher education expenses, during the calendar year that are equal to, or greater than, the gross distribution figure on Form 1099-Q, the distribution is tax-free. And when all 529 plan distributions in a year are tax-free, nothing is shown on the student's Form 1040. The IRS can always "audit" the return, but in the vast majority of cases will simply assume the 529 earnings were properly excluded.

If the check from the 529 plan is made payable to the account owner, guess it is you, the process is different even if the end result is the same. This time, Form 1099-Q is issued with your name and Social Security number. In addition, a box on the Form 1099-Q is checked, indicating that the "distributee" is someone other than the beneficiary. Even if the distribution is entirely tax-free, that is the account beneficiary incurred sufficient qualified expenses during the year, the IRS is likely to issue a notice to the account owner when it sees nothing reported on yourForm 1040. you now have to respond to the IRS and justify the exclusion of earnings.



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