Hello All 
Working on my daughter taxes and I’m a little stumped on how to answer this question regarding her 529 money:
Distribution Transfer
Did you roll over or transfer all or part of this distribution $x.xx within 60 days to another qualified tuition program?
A check was sent directly from the plan to the college.
If I answer yes then daughter gets back her full withholding from her part time job.
If I say no, then some money is subtracted from her refund? She is the beneficiary of the 529, we the parents are the owners. I didn’t realize she would somehow have to add this distribution to her income, is that what is happening?
This is the first we’ve dealt with this so I wasn’t sure how to answer. Thanks for any help you can provide.
A 529 check (distribution) sent directly to the college is not a “rollover or transfer to another QTP.” So the question as you have presented it, based on your facts, should be answered NO.
A qualified 529 distribution should not be added to income - it is 100% non-taxable.
Edited to add: perhaps you entered other information indicating that qualified expenses were less than the 529 distribution, and the tax program wants to tax the earnings portion of the excess (and add the 10% penalty) unless you tell it that the excess was a rollover or transfer within 60 days to another QTP.
I didn’t do anything you just have to enter the amount of gross distribution, earnings and basis from form 1099-Q. I don’t understand why it would change her refund!!
Did you answer any questions about Qualified Education Expenses? If not, when you get to that part, you should see the refund amount go back up (assuming that the amount of the 529 distribution does not exceed 529 QEE).
I don’t know how I missed that part(entering tuition). At first I was getting this in response to trying to enter tuition:
Let’s Check This Entry
It looks like you’re trying to enter the education credits for yourself, but earlier you indicated that you were claimed as a dependent on someone else’s return - probably a parent’s.
Generally, whoever claims you as a dependent should take the education credits. Yes, even though your school probably sent Form 1098-T to you, in your name, with your Social Security number. However, you should enter your education expenses to avoid paying tax on your Education Savings Account (ESA) or qualified tuition program (QTP).
But then somehow I was able to enter the info and her refund went back up to the withholding limit. Thanks
Looking at the worksheet Qualified Tuition Program (QTP) Computation of Taxable Distribution it added $148 to her income. She is still getting back the whole amount that was withheld, but I’m not sure this is right???
Could it be that my 1099-Q form is wrong? It has my daughter as the Recipient on the 1099-Q instead of the University. Does anyone else have this same form and circumstance where the college was paid from the 529? Is your college listed as the recipient??