Get answers to frequently asked questions about Education Savings Account and Qualified Tuition Program distributions in Intuit ProConnect.
Follow these steps to enter an education distribution from Form 1099-Q:
- Go to the Input Return tab.
- Select Income from the left menu.
- Select Education Distributions (1099-Q).
- Scroll down to the Qualified Expenses subsection.
- Enter the amounts in the appropriate fields.
- This is mandatory to show any of the distribution as nontaxable.
- Scroll down to the Form 1099-Q subsection.
- Enter the amounts as reported on the form.
- Select the plus sign (+) near the top of your input screen to add another 1099-Q if needed.
ProConnect Tax will generate a worksheet calculating the taxable part of the education distribution.
How to report an education distribution payment from Form 1099-Q:
- Go to the Input Return tab.
- From the left of the screen, select Income and choose Education Distributions (1099-Q).
- Under the Education Distributions (1099-Q) section, mark the checkbox labeled Spouse, if applicable.
- Under the Qualified Expenses subsection, enter the Higher education (net of nontaxable benefits).
- Check out this IRS resource to learn what’s considered a qualified education expense.
- Enter the total expenses for any ESAs and QTPs in the applicable fields for the taxpayer or spouse.
- Enter the Elementary and secondary education (net of nontaxable benefits).
- Under the Form 1099-Q subsection, enter the amounts for boxes 1–5 in the applicable fields.
- The earnings portion of the distribution for taxable QTP rollovers are included in income on the tax return and subjected to the 10% penalty in Part II of Form 5329.
- Refer to Pub 970 for information regarding the taxability and nontaxability of ESA and QTP rollovers.
- Click the plus (+) from the top of the screen to add more 1099-Q distributions.
If the distribution becomes nontaxable, there is a strong likelihood that the client will receive a notice indicating amounts as taxable. This is because the IRS was notified of the distribution but doesn’t have any knowledge about what the distribution was used for or how much was used.
How to indicate the distribution was absorbed and not taxable:
There isn't a place in the program to indicate that a distribution was absorbed and not taxable. Use your word processor to create a statement, and attach it as a PDF to your return.
Follow these steps to attach a PDF to a return:
- Go to the Input Return tab.
- On the left of the screen, select General and choose Electronic Filing.
- Select e-file PDF/Miscellaneous.
- Select the blue e-file Attachment link at the top right.
- Click Attach PDF.
- Locate and select the PDF, and then click Upload.
ProConnect doesn't have specific input for Trustee-to-Trustee Transfer Checkbox (6) and Designated Beneficiary Checkbox (6). Refer to the Form 1099-Q instructions for how to treat these items.
