529 withdrawal

Parents Forum
1

<p>Good morning:
I have no more hair to tear out - In 2012 I withdrew 35K from son's 529 (oops) - in that year, he received 10K scholarship and I paid 12K to school. Earnings are 5K. On the 1099q, recipient is not designated beneficiary (it's me, owner). </p>

<p>Son has 5K in income for 2012. I Cannot figure out the best way to assign these expenses and the income from taking too much out - son puts scholarship on his return? But I need that to balance my over-withdrawal? The total earnings on the withdrawal are 5K. Am I taxed on principal that I withdraw? Any help will be gratefully appreciated. Thank you.
Stick with Turbotax or use paper this time?</p>

2

<p>You can withdraw, without penalty, amounts equal to scholarships received in the year in which those scholarships were awarded. Just be aware that some scholarships are split between fall and spring so when you take out those funds matters.</p>