529 Account distributions and completing tax forms

mamabear1234
Sun, 16 Jan 2011 14:47:33 +0000

We have never reported it anywhere on D’s tax returns (the 529 withdrawals go to her and then college is paid from her checking account. My understanding is that it is not reportable income.

This year she did pull out an extra amount, because she was studying abroad and traveling a lot. Since she has a merit scholarship, the excess amount will not be subject to the penalty, but she will owe tax on the earnings portion of the withdrawal. Our withdrawal statement from Vanguard did not list how much that is, however, so we will have to do more digging.