Question

I have a question regarding 1099-Q reporting. My son received a Form 1099-Q. Does he have to report his earnings from this plan, or can he claim some deductions for education expenses?

Answer

Regarding 1099-Q reporting, most payments from qualified education program beneficiaries aren’t taxable. So, don’t report these on a return. However, annual distributions might be more than your son’s qualified education expenses. If so, he should report some of the earnings on Form 1099-Q, Box 2 as income on his return. If the earnings are more than his qualified educational expenses, he must report that amount without any further deduction. His qualified expenses will reduce the taxable amount. Qualified expenses include:

  • Tuition
  • Fees
  • Books
  • Supplies
  • Equipment

To learn more about reporting earnings and Form 1099-Q, see Publication 970 at www.irs.gov.

Related Topics

Related Resources

Penalty Relief Options

Discover the reasons the IRS grants tax penalty relief, including errors, administrative waivers such as first-time penalty abatement, and reasonable cause.

I have a question about 1099-A reporting. If my home was foreclosed and I received a Form 1099-A, what do I do?

What do you need to do if you receive a 1099-a form? Learn more from the tax experts at H&R Block

Tax Reform for Homeowners | H&R Block

The latest tax reform bill impacts a few housing deductions. Learn more about the changes to these deductions with the experts at H&R Block.

IRS Letter 3173 – Third Party Contacts

The IRS has contacted third parties to help figure out what you owe. Learn more about letter 3173 from the tax experts at H&R Block.