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mydtaxes
New Member

How do I get Turbo Tax to understand that my 1099Q distribution is a special non qualified distribution because of a scholarship and has no 10% tax penalty?

I seriously need help comprehending the worksheets TT used to calculate any taxable portions of distributions on my 1099Q and also to know if I entered the information correctly into my tax return, my dependent student son's tax return, and my non-dependent student daughter's tax returns and understand who has the taxable portion(s). And know how TT calculated those and also see that TT doesn't have any IRS 10% tax penalty. I am recipient of one 1099Q for my beneficiary non dependent student daughter (Turbo tax asked both of us about 1099Q forms and we both answered the questions with me answering I am recipient and beneficiary student is my non dependent daughter and her saying she is not recipient, I am, and she is the beneficiary student. She had financial aid and scholarships that paid for some of her QHEE (qualified higher education expenses) but the remaining QHEE we paid for using the 1099Q distribution. But also the total distribution was more than the remaining QHEE and I'd requested distribution from the QTP (529 plan) because she'd had scholarships prior years and finished her degree in 2022 so I withdrew the excess funds knowing it'd be taxable income. (but should avoid the IRS 10% penalty) For my son, he received a 1099Q and I also received a 1099Q. He had financial aid grants and scholarships which exceeded his QHEE (and so we know the portion of FA & SCH that exceeded QHEE is taxable income for him) but his room and board expenses (which FA and SCH do not pay for) and I paid for using the 1099Q distributions and the total room & board costs exceeded the total distributions (both his and my 1099Q). Again, we both answered Turbo Tax's questions to enter the 1099Q (I entered both 1099Q forms, answering that I was recipient of one 1099Q for my dependent student son and he was recipient of other for which he was beneficiary student) and he answered saying I was recipient of one 1099Q form but he was the beneficiary student and he was recipient of other 1099Q form as well as the beneficiary student.
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