How much of my Form 1099-Q income is taxable?
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If you used the entire distribution shown in Box 1 of your Form 1099-Q for education expenses, then the distribution is not taxable and is not reported on your tax return.
If you didn't use the entire 529 plan distribution shown in Box 1 of your Form 1099-Q for education expenses, then part of the distribution may be taxable. Only the earnings portion of the distribution is taxable, and sometimes it's only part of the earnings that's taxable.
For example, if your 1099-Q Box 1 has a distribution of $10,000 and Box 2 has earnings of $2,000, and you didn't use any of the $10,000 for education expenses, then the full $2,000 of earnings is taxable.
Continuing with the example, if you used $6,000 of the $10,000 distribution on education expenses instead of $0, then only $800 of the $2,000 of earnings is taxable. Here's how this is calculated:
$2,000 earnings * ($4,000 distribution not used for education expense / $10,000 total distribution) = $800 taxable earnings
If you enter your Form 1099-Q and education expense information, we'll calculate the taxable amount for you.
If you used the entire distribution shown in Box 1 of your Form 1099-Q for education expenses, then the distribution is not taxable and is not reported on your tax return.
If you didn't use the entire 529 plan distribution shown in Box 1 of your Form 1099-Q for education expenses, then part of the distribution may be taxable. Only the earnings portion of the distribution is taxable, and sometimes it's only part of the earnings that's taxable.
For example, if your 1099-Q Box 1 has a distribution of $10,000 and Box 2 has earnings of $2,000, and you didn't use any of the $10,000 for education expenses, then the full $2,000 of earnings is taxable.
Continuing with the example, if you used $6,000 of the $10,000 distribution on education expenses instead of $0, then only $800 of the $2,000 of earnings is taxable. Here's how this is calculated:
$2,000 earnings * ($4,000 distribution not used for education expense / $10,000 total distribution) = $800 taxable earnings
If you enter your Form 1099-Q and education expense information, we'll calculate the taxable amount for you.
