529 1099-Q

bilvihur

I have NYS 529 accounts for my grand kids. Their parents paid their college tuitions in 2021, and I reimbursed the parent's bank account. Now I received 1099-Q's (reported to IRS) because I didn't have the checks made out to the beneficiaries (grand kids). If the feds come knocking at my door, how do I prove that the 529 withdrawal was a qualified education expense? It looks like I would have gotten the 1099-Q even if the checks went directly to the colleges. How do the rest of you handle 529 transactions?

Old_Joe

@bilvihur- Good morning. This Off-Topic section is probably not the best place for your question, as it doesn't get all that much exposure to the majority of MFO posters.

Your post would seem to be a good fit for the "Other Investing" category, where you should get much better exposure. You should be able use the little "gear wheel" at the upper right of your post to "edit" your post and change the posting category. If that doesn't work just re-post over in "Other Investing" and leave it in both places.

OJ

bilvihur

Thanks for the good advice Joe.

yogibearbull

There are 529 rules on who get the 1099-Q.

In any event, keep records on tracing of the money. So, in this case, your check to parents and parent's check for college tuition.

Sven

On your 1099-Q, you are the recipient with your social security # and the FBO (for benefit of) of the grandkid name. The IRS also gets a copy of that 1099-Q. When you file that on your 1040, state that you are paying your grandkid qualified education expense including tuition, room and board, books & supplies, and computer. Itemize each expense category on spreadsheet would be a good idea. Like yogibb said, keep all the receipts to the parents and college just in case.