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E-file Form 1099-Q Online for 2022 Tax Year

What is a 1099 Q?

Form 1099-Q, (Payments from Qualified Education Programs) is an IRS (Internal Revenue Service) form sent to individuals who receive distributions from a Coverdell Education Savings Account (ESA) or a 529 plan. This form is used by taxpayers to fill out both federal and state tax returns if the distributions received are subjected to tax. A 529 plan is a state-run tax-advantaged account that allows you to set aside a fund for educational expenses. The institutions include elementary, secondary (middle school through high school), and postsecondary schools and the list of expenses includes among other things tuition, books, fees, room and board, and computer equipment.

Both ESAs and 529s are funded with money that has been taxed. If the taxpayer used all the funds distributed for qualified education expenses, nothing needs to be reported on their federal income tax return. If you create one of the accounts to put someone other than yourself through school, that student has no control over the funds and is not responsible for any of the tax consequences. 1099-Q form must be mailed to recipients by February 15th and e-filed with the IRS by March 31st each year.

How to File Form 1099-Q?

1099 Q Form
  • Box 1:
    Gross Distribution
  • Box 2:
    Earnings
  • Box 3:
    Basis
  • Box 4:
    Trustee-to-Trustee Transfer Checkbox
  • Box 5:
    Checkbox
  • Box 6:
    Designated Beneficiary Checkbox

Information required to file Form 1099-Q:

  • Taxpayer's (PAYER/TRUSTEE) information
  • Account number. The account number is required if, the taxpayer has multiple accounts for a recipient who may be filing more than one Form 1099-Q.
  • Distributions information

Watch our step-by-step video to E-File Form 1099-Q with IRS

Form 1099-Q Box 6 Distribution Codes (if reported)

Code Code Title Description
1 Distributions Distributions (including transfers) to the recipient and any direct payments to a qualified educational facility. However, use code 2 or 3 for withdrawals of excess contributions.
2 Excess contributions plus earnings taxable in the current year Withdrawals of excess Coverdell ESA contributions and earnings unless code 3 applies.
3 Excess contributions plus earnings taxable in the prior year Withdrawals of excess contributions from a Coverdell ESA. Advise payees, at the time the distribution is made, that the earnings are taxable in the year in which the excess contributions were made.
4 Excess contributions plus earnings taxable in the prior year Distributions you made after the recipient was disabled (see section 72( m) (7)).
5 Death Payments to a decedent's beneficiary, including an estate.
6 Prohibited transaction Prohibited transactions. See sections 408 (e)(2) and 408(e)(4) for similar rules that apply to a Coverdell CESA.

Who Must File 1099-Q Form?

A 1099-Q form should be filed and sent to the taxpayers by the officers or employees who have control of a program established by a state or qualified educational institution or anyone who has made a distribution from a 529 plan. The filer whose SSN is on the 1099-Q should report the form - it could be the beneficiary student or the account owner, who may be the parent or other relative.

The student/beneficiary will likely pay little or nothing on the distributions as they won’t have any other income.
When the filer pays a school expense with excess (other income) funds, they cannot claim a tuition deduction or either of the educational tax credits for the same expense.
There are three copies of the forms: one copy for the IRS, one for the Recipient, and one for the Payer.

When is the Deadline to File Form 1099-Q?

Filing Type Deadline
Recipient copy January 31st
IRS Paper Filing February 28th
IRS Electronic Filing March 31st

Note: If the due date/deadline falls on a Saturday, Sunday, or federal holiday, the filer will need to E-file on the next business day.

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