If you received Form 1099-Q for distributions you received during the tax year, the income may or may not be taxable. Before doing anything with the form, you must determine what part, if any, of the distribution is considered taxable.
Is part of my distribution taxable?
To determine if the distribution reported on Form 1099-Q is taxable, you need to know how much you paid for qualifying tuition, related fees, books, and room and board.
-Which is larger, the gross distribution in Box 1 of your 1099-Q or the amount of qualifying expenses that you paid for tuition and related fees?
- The Two Amounts are Equal: Your distribution is not taxable. You do not need to report this on your return. Retain Form 1099-Q for your records.
- The Amount in Box 1 is Larger: Part of your distribution is taxable.
- The Amount of Qualifying Expenses is Larger: Your distribution is not taxable. You do not need to report this on your return. Retain Form 1099-Q for your records. If you receive a 1098-T for these expenses, you may qualify to take a credit or deduction for your expenses. Reduce the amount of expenses by the amount in Box 1 of your 1099-Q. The remaining is what was paid out-of-pocket and can be claimed as either a Tuition and Fees Deduction or an Education Credit.
Prior years up to 2017 - The 1099-Q gets reported on the 1040 Line 21 Other Income.
2018 - The 1099-Q gets reported on the Sch 1 Line 21 Other Income.
2019 & 2020 - The 1099-Q gets reported on the Sch 1 Line 8 Other Income.
2021 - The 1099-Q gets reported on the Sch 1 Pg 1 Line 8z Other Income.
