Hi Hal_AI, I appreciate the clarification and help! If I understand correctly, I should enter the box 1, 2 and 3 information, from the 1099-Q, on the dependent student's tax return which in my example above would have the full earnings amount in Box 2 be taxable earnings. The tax and penalty would be applied at the student's lower tax bracket. Then, as the parent, I should enter the 1099-Q on my return by using your TurboTax trick to get it to report the Educational expenses correctly and this would allow us to take the deduction? We should also enter the 1098-T on our tax return even though it is issued in the student's name? Another question, if we have very few deductions, and we are getting the standard deduction for married filing jointly, should we even add the 1099-Q and 1098-T on our tax return?
